Inflation and the Crawling Peg: the Peruvian case

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dc.contributor.advisorBlanco, Herminio A.
dc.contributor.committeeMemberHuddle, Donald L.
dc.contributor.committeeMemberSmith, Gordon W.
dc.creatorChoy, Ines Marylin
dc.date.accessioned2018-12-18T21:22:47Z
dc.date.available2018-12-18T21:22:47Z
dc.date.issued1982
dc.description.abstractIt is suggested that in cases of frequent changes in the exchange rate, like in the Crawling Peg system, a vicious circle might develop: depreciation of the exchange rate may lead to increased domestic inflationary pressures and further rounds of changes in the exchange rate. This mechanism may be present in the Peruvian economy. A system of Crawling Peg has been adopted and although the deficit in the balance of payments was eliminated, the domestic rate of inflation is still very high. However, in the strict econometric sense, it is difficult to affirm that inflation causes changes in the exchange rate or vice versa because both variables are determined by factors such as the underlying monetary and fiscal policies. In order to examine the relationship between inflation and changes in the exchange rate a model is tested for the Peruvian case. In this model the exchange rate, international reserves and the rate of inflation are jointly determined. Although there is not a direct causality, in the econometric sense, there is a relationship between both variables. As long as the domestic rate of inflation is higher than the world rate of inflation there will be feedback between inflation and changes in the exchange rate.
dc.format.digitalOriginreformatted digital
dc.format.extent87 pp
dc.identifier.callnoThesis Econ. 1982 Choy
dc.identifier.citationChoy, Ines Marylin. "Inflation and the Crawling Peg: the Peruvian case." (1982) Master’s Thesis, Rice University. <a href="https://hdl.handle.net/1911/104420">https://hdl.handle.net/1911/104420</a>.
dc.identifier.digitalRICE2055
dc.identifier.urihttps://hdl.handle.net/1911/104420
dc.language.isoeng
dc.rightsCopyright is held by the author, unless otherwise indicated. Permission to reuse, publish, or reproduce the work beyond the bounds of fair use or other exemptions to copyright law must be obtained from the copyright holder.
dc.titleInflation and the Crawling Peg: the Peruvian case
dc.typeThesis
dc.type.materialText
thesis.degree.departmentEconomics
thesis.degree.disciplineSocial Sciences
thesis.degree.grantorRice University
thesis.degree.levelMasters
thesis.degree.nameMaster of Arts
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