The literature on strategic policy interactions has focused on the implications of alternative strategic policy interactions, cooperative versus noncooperative, for equilibrium macroeconomic policies given the state of the world economy. This paper asks how changes in world economic conditions...

This paper examines the effects of permanent and transitory changes in government purchases in the context of a model of a small open economy that produces and consumes both traded and nontraded goods. The model incorporates an equilibrium interpretation of the business cycle that emphasizes the...

Since the advent of managed floating it has come to be accepted as a stylized fact that short-run deviations from purchasing power parity are both substantial and persistent. Two explanations of these deviations have been advanced in the literature. One emphasizes the role of changes in...