This study shows that the learning by doing (LBD) effect has substantial, both quantitative and qualitative, consequences for the international transmission of monetary policy. LDB implies that a country can increase its productivity-increasing skill level, at the expense of the neighbour, by...

One recent line of research on exchange rates is the effect of fixed or floating currencies on long-term growth. One difficulty with such studies is that emerging market countries with certain imbalances and potentially hard-to-observe policy distortions are more likely to choose a fixed...

After an expansionary monetary policy shock employment increases and unemployment falls. In standard New Keynesian models the fall in aggregate unemployment does not affect employed workers at all. However, Lüchinger, Meier and Stutzer (2010) found that the risk of unemployment negatively...

After an expansionary monetary policy shock employment increases and unemployment falls. In standard New Keynesian models the fall in aggregate unemployment does not affect employed workers at all. However, Luchinger, Meier and Stutzer (2010) found that the risk of unemployment negatively...

This paper assesses the applicability of new Keynesian DSGE models to low income economies similar to those in Sub Saharan Africa. To this effect, we first review the development, criticisms and recent advances in DSGE modeling. Then we assess the implications that emanate from the assumptions...

The paper shows that the impossibility to reach a real exchange rate target, as proposed by the "Monetary Trilemma" can be circumvented by adding one policy instrument. In the choice between countercyclical fiscal policy and control of capital movements, the first one appears as the preferred...

With the competitiveness of UK manufacturing declining steadily during the interwar period, and a significant rise in unemployment in the early 1930s, the UK government responded by introducing the General Tariff in February 1932 in an attempt to halt the increase in unemployment and the...

German exports suffered a sharp decline during the international economic and financial crisis. But recently a strong turnaround has taken place. Macroeconomic stimulus measures in numerous countries have likely contributed to this export recovery. Germany's manufacturers are at the forefront of...

Purpose – There has been significant interest in the classification of exchange rate regimes in order to investigate a wide range of hypotheses. Studies of the effects of exchange rate regimes on crises and other aspects of economic performance can have important implications for policy...

Singapore's unique monetary policy consists of a managed exchange rate framework that can be characterized as a Taylor-like reaction function with the nominal devaluation rate instead of the nominal interest rate as the main policy instrument. We build a small open economy New Keynesian model to...