This paper examines the use of the nominal exchange rate in achieving disinflation under managed exchange rate regimes. Most previous empirical studies have not explicitly identified expectations in the wage and price setting behavior of their econometric models, despite the importance of...

In this paper, the authors estimate the marginal rate of substitution between aggregate nondurable consumption and government expenditure using U.S. data from 1953 to 1993. This estimate is an important input to any attempt to assess the overall effectiveness of fiscal policy since it directly...