Adao, Bernardino; Correia, Isabel; Teles, Pedro - In: Journal of Economic Theory 144 (2009) 4, pp. 1468-1488
This paper assesses the relevance of the exchange rate regime for stabilization policy. Using both fiscal and monetary policy, we conclude that the exchange rate regime is irrelevant. This is the case independently of the severity of price rigidities, independently of asymmetries across...