Stabilization with Exchange Rate Management
研究开放经济稳定化计划的两阶段过程：第一阶段降低贬值速度但财政赤字未消，第二阶段要么放弃汇率管理要么大幅削减赤字，并分析不同第二阶段政策对第一阶段经济动态的影响。
Stabilization programs in open economies typically consist of two stages. In the first stage the rate of currency devaluation is reduced, but the fiscal adjustment does not eliminate the fiscal deficit that causes growth of debt and loss of reserves, making a future policy change necessary. Only later, at a second stage, is this followed by either an abandonment of exchange rate management or by a sufficiently large cut in the fiscal deficit. We study how different second-stage policy changes affect economic dynamics during the first stage. These changes include tax increases, budget cuts on traded and nontraded goods, and increases in the growth rate of money.