01735cas a2200253 a 4500 AALejournalIMF001930 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451958591 1018-5941 BD-DhAAL BD-DhAAL Guidotti, Pablo. Losing Credibility : The Stabilization Blues / Pablo Guidotti, Carlos Vegh Gramont. Washington, D.C. : International Monetary Fund, 1992. 1 online resource (44 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 In exchange rate-based stabilization programs, credibility often follows a distinct time pattern. At first it rises as the highly visible nominal anchor provides a sense of stability and hopes run high for a permanent solution to the fiscal problems. Later, as the domestic currency appreciates in real terms and the fiscal problems are not fully resolved, the credibility of the program falls, sometimes precipitously. This paper develops a political-economy model that focuses on the evolution of credibility over time, and is consistent with the pattern just described. Inflation inertia and costly budget negotiations play a key role in the model. Mode of access: Internet Vegh Gramont, Carlos. IMF Working Papers; Working Paper ; No. 1992/073 Full text available on IMF http://elibrary.imf.org/view/journals/001/1992/073/001.1992.issue-073-en.xml IMF e-Library