In most macroeconomic models, the substitutability between domestic and foreign goods is calibrated using aggregated data. This imposes homogeneous elasticities across goods, and the calibration is only valid under this assumption. If elasticities are heterogeneous, the aggregate...

This paper describes the result and the methodology of updating nominal and real effective exchange rate weights on the basis of trade data over 1999-2001. The underlying framework is an updated version of the IMF''s current effective exchange rate calculation, which uses weights largely based...

The literature on two-tier foreign exchange markets has concentrated on relating various shocks to the spread between the exchange rates relevant to the two tiers of the exchange market. In some earlier work we found that none of the typical predictions of theory held up empirically as BLEU...

This paper discusses the scope, methods, and effects of international coordination of economic policies. In analyzing the scope for and of coordination, the paper addresses the rationale for coordination, barriers to coordination, the range and specificivity of policies to be coordinated, and...