01705cas a2200241 a 4500 AALejournalIMF000907 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451954340 1018-5941 BD-DhAAL BD-DhAAL Agenor, Pierre-Richard. Exchange Restrictions and Devaluation Crises / Pierre-Richard Agenor. Washington, D.C. : International Monetary Fund, 1990. 1 online resource (40 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 develops a model of devaluation crises for an economy where foreign exchange restrictions lead to the emergence of a parallel market. The devaluation rule relates the size of the parity change to the spread between the official and parallel exchange rates. The mechanism that triggers the devaluation relates credit policy and the inflation tax. A credit expansion leads to an increase in the spread and possibly to a fall in inflation tax revenue, as agents switch away from domestic currency holdings. A devaluation reverses temporarily the process of erosion of the tax base if the associated fall in the premium raises the credibility of the new parity. Mode of access: Internet IMF Working Papers; Working Paper ; No. 1990/084 Full text available on IMF http://elibrary.imf.org/view/journals/001/1990/084/001.1990.issue-084-en.xml IMF e-Library