Ghironi, Fabio; Cavallo, Michele - Department of Economics, Boston College - 2000
incomplete asset markets, stationary net foreign assets, and endogenous nominal interest rate setting a la Taylor (1993). Under … real net foreign assets accumulated in the previous period. The predictive power of net assets for the exchange rate is … rate depends on the past GDP differential, along with net foreign assets. Endogenous monetary policy and asset dynamics …