This paper examines a continuous-time two country dynamic monetary equilibrium in which countries with possibly heterogeneous tastes and endowments hold their own money for the purpose of transaction services formulated via money in the utility function. Given a price system, no-arbitrage...

We study three different exchange rate regimes in a stochastic OLG model with free capital mobility and incomplete markets. The regimes are characterized by the type of coordinated seignorage financed transfer (or fiscal) policy in place. We are especially interested in how the different types...

The risk premium is a function of both the interest rate differential and the gap between the current exchange rate and its long-run equilibrium in a model of the foreign exchange market with both non-speculating traders and rational speculators. If the speculators have an alternative to...

This paper investigates a monetary model of exchange rate determination: an extension of the Krugman basic target zone model with price inertia applied to the French Franc. We consider a novel theoretical argument, the Threshold Cointegration, such that the long-run relationship between the...

This paper studies the effect on Anglo-Irish trade breaking the link between the Irish pound and sterling in 1979. A gravity model is used to explore this issue. No evidence is found of a structural break following the dismantling of the currency union. Nor did the resultant exchange rate...

The fifteen newly independent republics of the former Soviet Union began 1992 with a functionning ruble area inherited from the Soviet union. Indeed, early that year, the ruble was atop the currency hit parade; no other currency served as sole legal tender across so many national borders. This...