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A modern reconsideration of the theory of optimal currency areas

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Optimal contract currencies and exchange rate policy

Ejler Storgaard, Peter (contributor) - 2002 - [Elektronische Ressource]

The paper develops a simple stochastic new open macroeconomic model in which pricesetting firms' choice between producer currency pricing and local currency pricing is endogenous. We show that, in equilibrium, firms will denominate their export price contracts in the currency of the country with...

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