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The Mexican peso/us $ spot exchange rates in December 1997 and December 1998 were 7.0 and 7.5, respectively. During 1998 inflation rates in Mexico and
The Mexican peso/us $ spot exchange rates in December 1997 and December 1998 were 7.0 and 7.5, respectively. During 1998 inflation rates in Mexico and US were 20% and 5%, respectively and the one year interest rates in December 1998 in pesos and dollars were 15% and 8%, respectively. What happend to the real value of the peso during 1998?
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