4. MACRO ADJUSTMENT IN THE SHORT RUN

In this chapter, we take up tools that may be useful in short run policy formulation, especially external or inflation stabilization attempts. The topics covered are export subsidies and import quotas, food subsidies and food price inflation, public sector pricing, and orthodox and heterodox anti-inflationary shocks.

4.1. Export subsidies and import quotas

The discussion in Section 2.6 makes clear that devaluation has repercussions throughout the economy—in commodity and financial markets and on the inflationary process. Are there ways in which its beneficial influences can be captured, without the problems?

‘Partial’ devaluations in the form of commercial policy interventions are means to this end. They require ...

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