The authors analyze macrodynamic adjustment during financial liberalization in Chile and New Zealand. During the adjustment to more open capital accounts in the late 1970s or mid-1980s, both countries experienced appreciation of the real exchange rate and a collapse of net exports, while domestic interest rates slowly converged to international levels. The authors develop and estimate a two-sector dynamic model using both current and time-varying...
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INFORMATION
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1992/11/30
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Document de travail de recherche sur les politiques
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WPS1026
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1
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1
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2010/07/01
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Financial liberation and adjustment in Chile and New Zealand
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real exchange rate