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Why is 'The Market' so Unforgiving? Reflections on the Tequilazo

dc.contributor.authorCalvo, Guillermo A.
dc.date.accessioned2007-01-18T19:50:43Z
dc.date.available2007-01-18T19:50:43Z
dc.date.issued1996-09-21
dc.identifier.urihttp://hdl.handle.net/1903/4031
dc.description.abstractMexico’s financial debacle and its impact on other emerging markets (the Tequila effect) has raised many fundamental questions. Mexico achieved fiscal balance in 1993, undertook several fundamental market-oriented reforms, signed a free trade agreement with a very large market (the NAFTA), became a member of the OECD, and was hailed by international institutions as a paramount example of successful reform. Yet, the December 20, 1994, devaluation brought the economy down like a house of cards. Output fell by more than 7 percent in 1995, the current account deficit sharply swung from about 8 percent of GDP in 1994 to zero, and investors turned their noses away from high-yield Mexican public debt even though the international community had plunked about $50 billion in a rescue package. In addition, Mexican problems quickly spread around the world’s emerging markets, including those exhibiting long and enviable track records.en
dc.format.extent172135 bytes
dc.format.mimetypeapplication/pdf
dc.language.isoen_USen
dc.subjecttequila effecten
dc.subjecttequilazoen
dc.subjectbalance-of-payments crisesen
dc.subjectoutput collapseen
dc.subjectwage stickinessen
dc.subjectprice stickinessen
dc.subjectpro-cyclical fiscal adjustmenten
dc.titleWhy is 'The Market' so Unforgiving? Reflections on the Tequilazoen
dc.typeArticleen
dc.relation.isAvailableAtDigital Repository at the University of Marylanden_us
dc.relation.isAvailableAtEconomics Departmenten_us
dc.relation.isAvailableAtCollege of Behavioral and Social Sciencesen_us
dc.relation.isAvailableAtUniversity of Maryland (College Park, Md.)en_us


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