In order to assess empirically the role of monetary factors in the process of short-run determination of output growth, inflation, and the trade balance, a model is developed for Japan and estimated for the period 1965-76. The model is essentially monetarist, in that the excess supply of cash...

Since the 1970s, a number of high-inflation Latin American countries have experienced persistent "dollarization." To interpret some of the stylized facts, a simple model is presented in which dollarization reflects the costs that are involved in switching the currency denomination of...

This paper analyzes the determinants of the evolution of exchange rates within the context of alternative models of exchange rate dynamics. The overshooting hypothesis is examined in models that emphasize differential speeds of adjustment in asset and goods markets as well as in models that...

A simple macroeconomic model is developed in order to analyze some of the dynamic elements of the devaluation-inflation spiral in the presence of a real government deficit financed through credit creation by the central bank. It is concluded that under those circumstances the objectives of price...