Aboal, Diego; Lorenzo, Fernando; Rius, Andrés - Departamento de Economía, Facultad de Ciencias Sociales - 2000
In a small open economy, the exchange rate is a key variable from the perspective of the political economy of macro policy. It is, indeed, one of the most powerful instruments that governments can use to achieve their goals. Recent theories of political macroeconomics stress that maximization of...