01903cas a2200253 a 4500 AALejournalIMF008794 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451974270 1018-5941 BD-DhAAL BD-DhAAL Calvo, Guillermo. Trade Reforms of Uncertain Duration and Real Uncertainty : A First Approximation / Guillermo Calvo, Enrique Mendoza. Washington, D.C. : International Monetary Fund, 1994. 1 online resource (42 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 trade reforms of uncertain duration undertaken in economies subject to real foreign and domestic shocks. These reforms induce consumption and import booms regardless of whether they succeed or fail and of the degree of intertemporal elasticity of substitution. If tariff revenue is rebated, a recession follows the boom, but without rebates a boom or a recession may follow depending on the outcome of the reform. Consumption fluctuations reflect imperfect credibility and real shocks, and the credibility component depends on the mean and risk of real asset returns. Thus, observed booms are a noisy signal of imperfect credibility. Quantitatively, lack of credibility produces sizable consumption cycles, but generally smaller than those induced by real disturbances. Mode of access: Internet Mendoza, Enrique. IMF Working Papers; Working Paper ; No. 1994/045 Full text available on IMF http://elibrary.imf.org/view/journals/001/1994/045/001.1994.issue-045-en.xml IMF e-Library