This paper critically analyses the strongly subjectivist approach to exploitation theory recently proposed by Matsuo … exploitation index can be constructed. It is argued that a minimal objectivism is necessary in exploitation theory, whereby … related to the 'New Interpretation' ([1]; [3]). It is argued that it captures the core intuitions of exploitation theory and …

Roemer's (1982, 1988) classical approach and all the crucial insights of exploitation theory are generalised, proving that …

theory for persistence have some modest support: in the data, the stickier is the price of a good the more persistent is its … real exchange rate, but the theory predicts much more variation in persistence than is in the data. The predictions of the … theory for volatiity fare less well: in the data, the stickier is the price of a good the smaller is its conditional variance …