Unanticipated money, output, and prices in the small economy

Optimal Monetary Policy in an Open Economy

“…One particularly convenient form specifies the level of the real money stock, relative to its equilibrium, in terms of the deviation of the current real exchange rate from its long-run equilibrium level. Rules of this kind are similar to those which appear in the recent literature on exchange market intervention; see, e.g., Boyer (1978), Cox (1980), Turnovsky (1983), and the papers in Bhandari (1985).…”

“…Rules of the form (20) characterize much of the current discussion of exchange market intervention; see Boyer (1978), Cox (1980), Turnovsky (1983 and papers in Bhandari (1985). Since 81 < 0, and assuming the more plausible case where A2 < 0, > 0, we see that the coefficient of S in (20) is positive.…”

Stabilization Policy in Multi-Country Models

“…As far as domestic disturbances are concerned, the FER is effective in insulating the economy from monetary shocks and the FLER regime, short of füll indexation, performs well in case of real shocks. As far as foreign disturbances coming from France are concerned, the FER regime insulates 7 Apart from the results reported in this paper, a sensitivity test was also performed for the …”

“…x The interested readers are further referred to Laursen and Metzler(1950), Branson and Rotemberg (1980), Cox(1980), Schmid (1982), Corden and Turnvosky(1983) and Argy and Salop(1983) for studies of negative transmission of foreign monetary disturbances.…”

The international transmission of economic shocks in a three-country world under mixed exchange rates

“…Each country is also exposed to a money supply disturbance (u™ 1 ). 8 Equation (5) describes the goods market equilibrium condition. According to equation (6), the domestic interest rate is equal to the foreign interest rate plus the expected rate of depreciation of the domestic currency.…”