A note on the impact of stabilization in international trade

Abstract

This note presents a situation in which the government surprises rational agents
by implementing an anti-inflation policy in place of one that fights against recession. As a
result, a pressure towards the balance of payments superavit is obtained during the impact
period. That conclusion stems from the surprise of the new government policy under a “leaning
against the wind” policy regime.

JEL Classification: F32; F62.