Are Stabilization Programs Expansionary?

Abstract

The empirical evidence presented in this paper casts doubts on the by now widely accepted "fact"that the exchange rate based stabilization programs are expansionary. Even though these programs were associated with output booms, no evidence of booms caused both by the stabilization programs is found. rather, positive external shocks seem to have caused both the output booms and the stabilization programs.Price stabilization; Inflation.