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The Natural Rate Of Interest In A Smallopen Economy

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  • FERNANDO DE HOLANDA BARBOSA

Abstract

The goal of this paper is to show that the natural rate of interest in a small open economy, with access to the world capital markets, is equal to the international real rate of interest. We show this property by using the infinitely-lived overlapping generations model and we use this model to analyze both fixed and flexible exchange rate regimes.
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Suggested Citation

  • Fernando De Holanda Barbosa, 2014. "The Natural Rate Of Interest In A Smallopen Economy," Anais do XL Encontro Nacional de Economia [Proceedings of the 40th Brazilian Economics Meeting] 033, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    • Handle: RePEc:anp:en2012:033
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    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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