Currency crises and collapses

Article Abstract:

The Mexican peso crises and other currency collapses were studied to identify common features of such events. Recent devaluations in Europe were also studied to find out the reasons behind the success there. The overvaluation resulting from exchange rate policies are argued to be the main common factor in the currency rises in Chile, 1978-82; Mexico, 1978-82; Finland, 1988-92; and Mexico, 1990-94. The governments in these four countries all tried to use a nominal exchange rate anchor to prevent inflation. Instead, serious financial and real economic difficulties resulted.

Finland, Chile, Mexico, Currency devaluation, Devaluation (Currency)

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Economic transition in Eastern Germany

Article Abstract:

A study of German reunification leads to the conclusion that a key factor in success is to manage an economy at high pressure in former West Germany, encouraging the creation of new capacity in former East Germany. This strategy needs to be backed by labor unions, and involves financing investment on a large scale. Unemployment compensation in former East Germany is preferable to subsidising jobs, if a long term solution is to be found. One aspect of the current political situation is that defence cutbacks can be carried out, freeing resources for economic growth.

Investment Offices, Labor organizations, Germany, East Germany, Germany, East, Economic conversion

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Brazil's incomplete stabilization and reform

Article Abstract:

The Brazilian government has made significant progress in controlling inflation after implementing its Real Plan in July 1994. However, sceptics are still in doubt over the economy's ability to continue growth since budget deficit, real appreciation, and external deficits have not been addressed. The country may experience a similar problem encountered by countries such as Latin America and Mexico unless it applies measures to improve reform and savings.

Administration of General Economic Programs, Economic Programs, Administration of Economic Programs, Currency Stabilization Programs, Prices and rates, Economic policy, Foreign exchange, Foreign exchange rates, Economic development, Inflation (Finance), Brazil, Currency stabilization, Economic stabilization, Inflation (Economics)

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