Escudé, Guillermo J. - In: Economics: The Open-Access, Open-Assessment E-Journal 7 (2013) 2013-30, pp. 1-110
This paper builds a DSGE model for a small open economy (SOE) in which the central bank intervenes the domestic currency bond and FX markets using two policy rules: a Taylor-type rule and a rule that determines the rate of nominal depreciation. The 2 'corner' regimes, in which only one policy...