01735cas a2200265 a 4500 AALejournalIMF009111 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451921212 1018-5941 BD-DhAAL BD-DhAAL Vegh Gramont, Carlos. Targeting the Real Exchange Rate : Theory and Evidence / Carlos Vegh Gramont, Guillermo Calvo, Carmen Reinhart. Washington, D.C. : International Monetary Fund, 1994. 1 online resource (50 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 presents a theoretical and empirical analysis of policies aimed at setting a more depreciated level of the real exchange rate. An intertemporal optimizing model suggests that, in the absence of changes in fiscal policy, a more depreciated level of the real exchange can only be attained temporarily. This can be achieved by means of higher inflation and/or higher real interest rates, depending on the degree of capital mobility. Evidence for Brazil, Chile, and Colombia supports the model's prediction that undervalued real exchange rates are associated with higher inflation. Mode of access: Internet Calvo, Guillermo. Reinhart, Carmen. IMF Working Papers; Working Paper ; No. 1994/022 Full text available on IMF http://elibrary.imf.org/view/journals/001/1994/022/001.1994.issue-022-en.xml IMF e-Library