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-budget rules that allow for bounded secondary surpluses or deficits. Comparing our results to those emphasized in the fiscal theory …
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that these conditions depend not only on the monetary-fiscal regime (as emphasized in the fiscal theory of the price level …
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We estimate an empirical model of exchange rates with transitory and permanent monetary shocks. Using monthly post-Bretton-Woods data from the United States, the United Kingdom, and Japan, we report four main findings: First, there is no exchange rate overshooting in response to either temporary...
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