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This paper provides a new test for whether different-currency assets are imperfect substitutes. The test exploits that under floating rates, changing public currency demand has no direct effect on monetary fundamentals, current or future. Price effects from imperfect substitutability are clearly...
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We study optimal investment in technologies characterized by the learning curve. There are two investment patterns … scale. If the curve is steep, firms invest earlier and on a smaller scale. We further demonstrate that learning investment … differs greatly from investment in technologies without learning effects. Learning investments generate substantial initial …
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