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Stabilization policies in developing countries with a parallel market for foreign exchange : a formal framework.

Agenor, Pierre-Richard

Stabilization policies in developing countries with a parallel market for foreign exchange : a formal framework. - 1990

Develops a model which incorporates trade and capital restrictions, illegal transactions, a parallel foreign exchange market, currency substitution features and forward-looking rational expectations. Uses this model to examine the implications of the existence of illegal trade transactions and parallel currency markets for short-run policy making in developing countries.










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