Three Essays On Monetary Policy In Small Open Economies
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Three Essays on Monetary Policy in Small Open Economies
Author | : Kai L. Chan |
Publisher | : |
Total Pages | : 380 |
Release | : 2008 |
Genre | : Monetary policy |
ISBN | : 9780549553779 |
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In the second chapter, a model with nominal wage rigidities is combined with the assumption that all goods are traded in the new open economy framework to derive an outcome where the home country has a strong bias towards its own good. Then it is shown that, under broad assumptions of the parameters of the model, overshooting is a consequence when interest elasticity of money demand is less than unity.
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