This paper examines the repercussions of induced currency depreciation in a small open economy. The results presented in this paper are based on a model which has firmer microeconomics foundation and that takes into account both the supply side and demand side effects of exchange rate...

This paper examines the effectiveness of interest rate policy to stabilize the economy in general and to control inflation in particular. The paper utilizes a dynamic model which has firmer microeconomic foundations. The model is used to establish links between inflation and other variables such...

Neo-Fisher effect states that an increase in nominal rate of interest which deemed to be permanent, will lead to a rise in inflation both in the short-run as well as in the long-run. In this paper, we study the possibility of occurrence of neo-Fisher effect in a new-Keynesian model. For this...