01897cas a2200241 a 4500 AALejournalIMF000250 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451847062 1018-5941 BD-DhAAL BD-DhAAL Khamis, May. Credit and Exchange Rate-Based Stabilization / May Khamis. Washington, D.C. : International Monetary Fund, 1996. 1 online resource (54 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper examines the behavior of private sector credit in chronic inflation countries that undergo exchange rate-based inflation stabilizations. It concludes that these programs are characterized by a strong increase in private sector credit, both in absolute terms and as a fraction of real economic activity. Empirical results using data for Mexico, Chile, Argentina, and Israel support a negative statistically significant relationship between credit and inflation for Mexico, Argentina, and Chile, but not for Israel. In addition, for both Chile and Mexico, dummy variables representing periods of inflation stabilization are positive and statistically different from zero indicating a stronger expansion in private sector credit during stabilization. These results could potentially explain the consumption boom that is usually present in the early stages of these programs. Mode of access: Internet IMF Working Papers; Working Paper ; No. 1996/051 Full text available on IMF http://elibrary.imf.org/view/journals/001/1996/051/001.1996.issue-051-en.xml IMF e-Library