This paper analyzes a two-commodity short-run macroeconomic model under fixed and flexible exchange rates. Goods are disaggregated into imports and exports. Both are consumed domestically, but only the latter is produced at home. While imports are available in international markets at a fixed...

This paper extends the multivariate stock-adjustment model commonly used in empirical studies of portfolio behavior in order to analyze the complete set of flow allocation decisions made by households (including consumption, expenditures on durables and houses, and various financial aggregates)....