01712cas a2200253 a 4500 AALejournalIMF000916 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451945584 1018-5941 BD-DhAAL BD-DhAAL Calvo, Guillermo. Credibility and the Dynamics of Stabilization Policy : A Basic Framework / Guillermo Calvo, Carlos Vegh Gramont. Washington, D.C. : International Monetary Fund, 1990. 1 online resource (48 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 studies price stabilization policy under both predetermined and flexible exchange rates. Under predetermined exchange rates, a non-credible stabilization program results in an initial expansion of output, followed by a later recession. The initial expansion accompanies an appreciating real exchange rate. Under flexible exchange rates, the recession occurs at the beginning of the program. The real exchange rate appreciates sharply on impact but depreciates afterwards. Lack of credibility is more costly under predetermined exchange rates because the real effects are more pronounced. Mode of access: Internet Vegh Gramont, Carlos. IMF Working Papers; Working Paper ; No. 1990/110 Full text available on IMF http://elibrary.imf.org/view/journals/001/1990/110/001.1990.issue-110-en.xml IMF e-Library