Inflation target, real exchange rate and external crisis in a Kaleckian model

Vol. 31 No. 4 (2011)

Oct-Dec / 2011
Published October 1, 2011
PDF-Portuguese (Português (Brasil))
PDF-Portuguese (Português (Brasil))

How to Cite

Porcile, Gabriel, Alexandre Souza, and Ricardo Viana. 2011. “Inflation Target, Real Exchange Rate and External Crisis in a Kaleckian Model”. Brazilian Journal of Political Economy 31 (4):579-93. https://centrodeeconomiapolitica.org.br/repojs/index.php/journal/article/view/422.
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Inflation target, real exchange rate and external crisis in a Kaleckian model

Gabriel Porcile
Departamento de Economia da Universidade Federal do Paraná.
Alexandre Souza
Banco Central do Brasil, Curitiba-PR.
Ricardo Viana
Departamento de Física da Universidade Federal do Paraná,
Brazilian Journal of Political Economy, Vol. 31 No. 4 (2011), Oct-Dec / 2011, Pages 579-593

Abstract

Which role should the real exchange rate play in an inflation target regime? In this paper this point is discussed from the point of view of the conditions required for avoiding an external crisis. With this objective, a dynamic Kaleckian model is presented focusing on the stability of the external debt to capital ratio. The main conclusion is that policy makers should monitor closely the evolution of the real exchange rate in order to make compatible the inflation target regime with external stability.

JEL Classification: F31; F34.


Keywords: Kaleckian models inflation target