The effects of inflation on real wage dispersion and welfare are studied in a cash-in-advance economy with a Walrasian goods market but a labor market with search friction. In the labor market, firms post wages and both employed and unemployed workers search among the posted wages. In...

In post-crisis Asia, all crisis-hit countries (except Malaysia) announced a shift from exchange rate based monetary policy framework to the explicit adoption of inflation targeting that uses interest rates as the key monetary policy operating instrument. In this study, we examine the empirical...

Evidence suggests that developing countries are more concerned with stabilizing the nominal exchange rate than developed countries. Some papers show not only that nominal exchange rates are less volatile, but also that international reserves and domestic interest rates are significantly more...

The paper presents a three period model that studies the eects of IMF loans on borrowers’ and lenders’ welfare highlighting the fact that the IMF has both de jure and de facto seniority rights over private creditors. It is shown that an IMF intervention affects borrowers and...

This paper carries out a comparative analysis of the inflation effects on relative price variability (RPV) in two economies with a inflationary experiences clearly different: Argentina and Spain. The results indicate non-neutrality of inflation, particularly in extreme inflation. The main...

Recent economic growth theory has suggested that wealth differences across nations must be due, at least in part, to the failure in many places to adopt existing production techniques. There are many potential reasons for the failure to adopt existing technology, including the political clout of...

This paper is an attempt to decompose the average transactions velocity of money into two or more individual velocities. When the economy-wide velocity is expressed as a weighted average of two disaggregated velocities, this provides an equation with two unknowns. The additional equation can be...

This paper examines the role of monetary policy in the presence of endogenous time preference. The framework in which this issue is addressed is a monetary model with cash-in-advance constraints and an additional trading friction that is typical of the class of “liquidity models†of...

This paper characterizes, empirically, the conduct of monetary policy in a small open economy. In particular, using as a case study the Chilean inflation targeting experience, we assess the role of the exchange rate in the determination of the interest rate. We conclude that Chile has adopted...

This study sets out to develop a simplified risk premium model to explain output volatility within the economies of Asia in the immediate aftermath of the Asian financial crisis. Firms are allowed to borrow from both domestic and foreign banks, with the firms� debts being loosely...