Several recent empirical and theoretical studies have revived interest in the relationship between the level of the exchange rate and economic development. This paper develops a dynamic model based on the Ricardian framework with a continuum of goods to consider the issue from a somewhat...

Modern Monetary Theory (MMT) has recently received significant at- tention in academic and policy circles. Critics question the sustainability of MMT-prescribed approaches to fiscal and monetary policy, especially over extended periods of time, in the presence of international financial markets,...

This paper discusses some of the inter-temporal issues that arise in the pursuit of real undervaluation to achieve rapid development. Policy makers face a trade-off between achieving a capital stock target in a given amount of time on the one hand and boosting real wages and output in the short...

Unilateral euroization is underexplored even in comparison to unilateral dollarization (taken to mean the adoption of the US dollar as legal tender). This paper attempts to partly fill this gap in the literature by investigating the case of Montenegro, which is one of the two countries that have...

Real exchange rate policy can potentially be utilized to target the trade balance and/or development through capital accumulation. However, the presence of distributional conflict and the trade-off between current and future trade imbalances complicates matters. I show that policy assignment...

Standard open economy macro models with unemployment predict a contractionary short-run effect of international capital inflows. Empirical evidence, on the other hand, often associates such inflows with short-term booms, and developing country policy makers frequently go out of their way to...

COVID-19 constitutes a health crisis which has rapidly turned into a social and economic crisis. This paper briefl y explores some of the issues raised by the combination of a massive supply-side shock with a massive demand-side shock, and the interaction of these with the exponential dynamics...

I develop the implications for real exchange rate cycles of different policy preferences, focusing in particular on broadly stylized features of major Latin American and East Asian economies. Recent political science literature has emphasized the role of factors such as the influence of the...

Developing country inflation is in the headlines again. Mainstream macroeconomics typically ignores the role of conflict while non-mainstream work tends to ignore macroeconomic constraints. This paper revisits the issue employing a dependent economy framework with eclectic characteristics....

An important body of literature explores the political economy reasons underlying delays in macroeconomic stabilization. This paper develops a framework to analyze conflict between two groups of economic actors, one that has an endowment of internationally tradable goods and another that is...