This paper proposes a new explanation for the greater variability of real exchange rates under pegged than under floating nominal exchange rate systems. The explanation hinges on the propensity of governments to use international trade restrictions and financial restrictions for...

The authors estimate common and nation-specific components of technology shocks, real demand shocks, and combined (common and nation-specific) monetary shocks using quarterly data for Korea and the United States.

This paper examines the relationship between inflation, exchange rates, and the pattern of international trade and payments in a small economy with utility-maximizing agents and a transactions demand for money. Fully anticipated inflation has real effects in the model through its role as a tax...

This paper presents a simp1e example in which incomplete asset markets create incentives for buyers and sellers to sign contracts that specify a price function which differs from the spot market equilibrium price function. The price function can exhibit downward stickiness in nominal prices, In...