TY  - BOOK
AU  - Calvo,Guillermo
AU  - Mendoza,Enrique G.
TI  - Trade Reforms of Uncertain Duration and Real Uncertainty: A First Approximation 
T2  - IMF Working Papers; Working Paper
SN  - 1451974272 :
SN  - 1018-5941
PY  - 1994///
CY  - Washington, D.C.
PB  - International Monetary Fund
KW  - Elasticity of Substitution
KW  - imf
KW  - Tariff Revenue
KW  - Terms of Trade
KW  - Trade Reform
KW  - Trade Reforms
KW  - Chile
KW  - Mexico
N2  - This paper examines trade reforms of uncertain duration undertaken in economies subject to real foreign and domestic shocks. These reforms induce consumption and import booms regardless of whether they succeed or fail and of the degree of intertemporal elasticity of substitution. If tariff revenue is rebated, a recession follows the boom, but without rebates a boom or a recession may follow depending on the outcome of the reform. Consumption fluctuations reflect imperfect credibility and real shocks, and the credibility component depends on the mean and risk of real asset returns. Thus, observed booms are a noisy signal of imperfect credibility. Quantitatively, lack of credibility produces sizable consumption cycles, but generally smaller than those induced by real disturbances
UR  - http://elibrary.imf.org/view/IMF001/07480-9781451974270/07480-9781451974270/07480-9781451974270.xml
UR  - http://www.imfbookstore.org/IMFORG/9781451974270
ER  -