This study incorporates international firm mobility into a new open economy macroeconomic model to analyze the question of how allowing for the international relocation of firms affects the impact of government spending shock on consumption and exchange rate. The study shows that the government...

In this paper, we argue that the effect of monetary and fiscal policies on the exchange rate depends on the fiscal regime. A contractionary monetary (expansionary fiscal) shock can lead to a depreciation, rather than an appreciation, of the domestic currency if debt is not backed by future...

The marked turnaround in Russia's foreign trade in 2023 exerted strong downward pressure on the Russian rouble, which lost around 30% of its value. Global oil prices were declining in the first half of the year, the EU import embargo on Russian oil depressed prices even further; and on top of...

We develop an extension to the Obstfeld and Rogoff (1995, 1996) two-sector model with imperfect competition and nominal wage rigidities. Contrary to the Obstfeld and Rogoff (1995, 1996) analysis, we make an explicit account for the investment side of the two-sector economy. We analyze the...

The article provides estimates of short-run and medium-run exchange rate pass-through into domestic prices in Russia during the period of 2000–2012 using vector error correction model. Exchange rate pass-through asymmetry estimates, its assessments on different sub-periods and exchange rate...

While exchange rate dynamics is an important topic in open economy macroeconomics, the standard tool commonly used to introduce exchange rate dynamics - the Dornbusch (1976) seminal paper along with phase diagram - is not well-suited for undergraduate students as most of them do not have yet a...