This article's focus is on the time adjustment paths of the exchange rate and prices in response to unanticipated monetary shocks. First, we expand the theoretical specification of the overshooting hypothesis by generalizing Dornbusch's model to include a third sector (i.e., agricultural...

A simple single-country model of price determination is displayed. The model captures the same basic ideas as other recent papers on the fiscal approach to analysis of determination of the price level but strips away some technical side issues by omitting money from the model. The model is then...

The paper analyzes the impacts of anticipated and unanticipated monetary policies on two large open economies that are dependent upon raw materials imports from a small third country. The analysis is based on asymmetric behavior on the supply side of both economies and an endogenous commod- ity...