Growth is endogenous in small open economies with substantial hidden or open unemployment, even under constant returns … to scale. Growth promoting policies, however, have implications for the balance of trade, and two instruments are needed … in order to achieve targets for both the growth rate and the balance of trade. The real exchange rate can serve as one of …

Recent empirical studies have found a robust correlation between competitive exchange rates and economic growth in … relation between investment and the real exchange rate. The model emphasizes the existence of (hidden) unemployment as a source … of endogenous growth, even under constant returns to scale. Growth promoting policies, however, affect the external …

undervaluations increase investment and the share of intermediate and capital goods imported, and decrease the shares of consumption …, wages, the services sector, and consumption goods imported. Overvaluations cause a reduction in investment, and an increase …

-2015 phase as the investment-driven economy, and the new normal economy since 2016. All three economies have been shaped by the …

more favourable loan package; that it is associated with over-investment even when investment does not create collateral … higher growth. Our analysis accommodates costly signalling for gaining credibility and also assigns a novel role to spending …

This paper studies the effects of an (exogenous) increase of nominal wages on profits, output, and growth. Inspired by … explicitly considers the dynamics of demand, prices, profits, and investment. The outcomes of the initial wage rise are found to …

. Econometric evidence supports the view that real exchange rate depreciations can impact employment growth positively, but this …