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Monetary Policy and the Predictability of Nominal Exchange Rates
Eichenbaum, Martin - 2017
inflation rates in shaping the response of real exchange rates to shocks. We document two facts about inflation … rate is a poor predictor of future inflation rates. We estimate a medium-size DSGE open-economy model that accounts … that accounts for the dynamics of exchange rates and their covariance with inflation are disturbances to the foreign demand …
Persistent link: https://www.econbiz.de/10012963169
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Inflation, Flexible Exchange Rates, and the Natural Rate of Unemployment
Gordon, Robert J. - 2021
The most important conclusion of this paper is that the growth rate of the money supply influences the U.S. inflation …, help to explain why U.S. inflation was so low in 1976 and why it accelerated so rapidly in 1978. Granger causality tests … indicate that lagged exchange rate changes influence inflation, but lagged inflation does not cause exchange rate changes. A …
Persistent link: https://www.econbiz.de/10013224206
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Exchange Rates, Inflation and the Sterilization Problem : Germany, 1975-1981
Obstfeld, Maurice - 2021
When the goals of internal and external macroeconomic equilibrium are in conflict, sterilized intervention in the foreign exchange market may provide an independent policy instrument through which the central bank can resolve its dilemma in the short run. This paper is concerned with the West...
Persistent link: https://www.econbiz.de/10013246518
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Tariffs, Terms of Trade, and the Real Exchange Rate in an Intertemporal Optimizing Model of the Current Account
Edwards, Sebastian - 2021
In this paper a minimal general equilibrium intertemporal model, with optimizing consumers and producers, is developed to analyze the process of real exchange rate determination. The model is completely real, and considers a small open economy that produces and consumes three goods each period....
Persistent link: https://www.econbiz.de/10013223889
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Temporary Terms of Trade Disturbances, the Real Exchange Rate and the Current Account
Edwards, Sebastian - 2021
In this paper a general equilibrium intertemporal model with optimizing consumers and producers is developed to analyze how the temporary term's of trade disturbances affect the path of real exchange rates and the current account. Changes in the internal terms of trade (due to tariff changes)...
Persistent link: https://www.econbiz.de/10013242918
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Intermediate Imports, the Terms of Trade, and the Dynamics of the Exchange Rate and Current Account
Obstfeld, Maurice - 2021
This paper studies the macroeconomic effects of an increase in the price of an imported intermediate production input. The framework of the analysis is a small open economy with abating exchange rate and endogenous terms if trade, in which saving depends on residents'(variable) rate of time...
Persistent link: https://www.econbiz.de/10013310251
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Wages, Relative Prices, and the Choice between Fixed and Flexible Exchange Rates
Marston, Richard C. - 2010
This paper reexamines the choice between fixed and flexible rates to take into account wage indexation and flexible prices. The model employed is of a small open economy faced by monetary and aggregate demand disturbances originating at ham and abroad. Aggregate supply behavior in this amp;el...
Persistent link: https://www.econbiz.de/10012760369
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Four Observations on Modern International Commercial Policy Under Floating Exchange Rates
Richardson, J. David - 2021
This paper describes the essential similarity between "modern" commercial policy, with its rent-like revenues, and capital transfers. Import barriers are shown to have consequently ambiguous effects on nominal and real exchange rates. The paper also examines some important supply-side welfare...
Persistent link: https://www.econbiz.de/10013223344
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The Flexible Exchange Rate System : Experience and Alternatives
Dornbusch, Rudiger; Frankel, Jeffrey A. - 2021
We review ten aspects of how floating exchange rates have worked in practice, contrasted with ten characteristics that the system was supposed to have in theory. We conclude that the foreign exchange market is characterized by high transactions-volume, short-term horizons, and an absence of...
Persistent link: https://www.econbiz.de/10013236814
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Flexible Exchange Rates in the 1970'S
Frenkel, Jacob A. - 2021
The 1970's witnessed the dramatic evolution of the international monetary system from a regime of pegged exchange rates into a regime of flexible rates. This paper surveys the key issues and lessons from the experience with floating rates during the1970's. The main orientation is empirical and...
Persistent link: https://www.econbiz.de/10013237038