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Optimal Devaluations

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  • Juan Pablo Nicolini
  • Constantino Hevia

Abstract

We analyze optimal ï¬scal,monetary and exchange rate policy in a simple small open econonomy model with price setting frictions.We perform our analysis in the tradition of optimal dynamic Ramsey problems.We characterize optimal allocations and the government policies that implement the optimal allocation.We analyze optimal ï¬scal,monetary and exchange rate policy in a simple small open econonomy model with price setting frictions.We perform our analysis in the tradition of optimal dynamic Ramsey prob- lems.We characterize optimal allocations and the government policies that implement the optimal allocation

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Bibliographic Info

Paper provided by Econometric Society in its series Econometric Society 2004 Latin American Meetings with number 337.

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Date of creation: 11 Aug 2004
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Handle: RePEc:ecm:latm04:337

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Keywords: Devaluations; Ramsey allocation;

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Citations

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Cited by:
  1. Constantino Hevia, 2011. "Optimal Devaluations," 2011 Meeting Papers 1070, Society for Economic Dynamics.
  2. Emmanuel Farhi & Gita Gopinath & Oleg Itskhoki, 2011. "Fiscal Devaluations," NBER Working Papers 17662, National Bureau of Economic Research, Inc.
  3. Pedro Teles & Isabel Correia & Bernardino Adao, 2007. "On the Relevance of Exchange Rate Regimes for Stabilization Policy," 2007 Meeting Papers 616, Society for Economic Dynamics.
  4. Dmitriev, Mikhail & Hoddenbagh, Jonathan, 2012. "Price Stability In Small Open Economies," MPRA Paper 46132, University Library of Munich, Germany, revised Feb 2013.
  5. Tommaso Monacelli, 2013. "Is Monetary Policy in an Open Economy Fundamentally Different?," IMF Economic Review, Palgrave Macmillan, vol. 61(1), pages 6-21, April.
  6. De Paoli, Bianca, 2009. "Monetary policy and welfare in a small open economy," Journal of International Economics, Elsevier, vol. 77(1), pages 11-22, February.
  7. Luis Catão & Roberto Chang, 2012. "Monetary Rules for Commodity Traders," NBER Working Papers 18536, National Bureau of Economic Research, Inc.
  8. Jacek Rothert, 2012. "Productivity or Demand? Identifying Sources of Fluctuations in Small Open Economies," 2012 Meeting Papers 187, Society for Economic Dynamics.
  9. Tommaso Monacelli, 2012. "Is Monetary Policy in an Open Economy Fundamentally Different?," Working Papers 449, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.

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