Using a symmetric multi-country model that allows for the possibility of stagnation, this paper analyzes the effects of openness on effective demand. A regime shift from autarky to free trade boosts the value of consumption utility by expanding the range of consumption goods available to people...

The paper examines effects of selected measures of stabilization in a financially repressed economy under two-tier exchange rate. Since financial repression is a generic category, it requires context-specific (model-specific) representation. In this paper financial repression is represented in...

This paper examines two issues that are central to the macroeconomic implications of large external shock for an emerging market economy. First, the paper examines how capital reversal and credit squeeze can reduce aggregate demand that lead to cascading contraction in employment. Secondly, the...