We study the full equilibrium dynamics of a two-country world economy with a floating exchange rate, traded and nontraded goods, and explicit modeling of the use of money. The resulting exchange rate equation depends on several details of the economic structure, such as the supply structure and...

Exchange-rate management is possible only if the government pursues consistent monetary and fiscal policies. The authors constructa model in which the real consequences of exchange-rate management depend on the precise time pattern of these policies. The authors study the constraints on feasible...

The management of the exchange rate is possible only if the government pursues a monetary-fiscal policy mix which is consistent with its exchange rate targets. In this paper with uncertainty concerning the length of individual life the real consequences of exchange rate management depend on the...