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policies, but theory is lagging behind many key policy debates. We fill this gap by developing a two-country DSGE model that …
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's international private capital flows from 2010Q1to 2019Q4. It uses the interest rate parity theory and the Markov Switching …
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This paper develops a dynamic general equilibrium model with two currencies to study the effect of negative interest rates on domestic money demand and exchange rates. Money demand for a currency depends on the relative ratio of the money market rate and the deposit rate of the central bank. If...
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Meese and Rogoff (1983) and subsequent studies find that economic fundamentals are apparently not able to explain exchange rate movements, but we argue that this so-called "Exchange Rate Disconnect Puzzle" arose because researchers such as Meese and Rogoff (1983) did not use the right...
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