This paper examines the impact of a monetary policy shock on output, prices, and the nominal effective exchange rate … main results suggest that an exogenous increase in the short-term interest rate tends to be followed by a decline in prices … variations in the short-term interest rate account for significant fluctuations in the nominal exchange rate and prices, while …

trade. Prices of final consumption goods are sticky in the consumer's currency. Pursuing an inward-looking policy, as … price indices is dominated by rules that allow for some fluctuations in prices such as nominal income or monetary targeting. …

tend to raise the general price level. In contrast to the accepted view, other prices do not seem to decline to offset the …

This paper uses a two-sector model to estimate the relationship between prices, money, and the exchange rate in … monetary aggregates, domestic prices, real income, and foreign interest rates. In addition, the error-correction model shows …

-through to prices, and interest rate policy following, rather than leading, financial market developments. Our estimated monetary …