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Optimal Devaluations

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Author Info
Juan Pablo Nicolini
Constantino Hevia

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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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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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F30 - International Economics - - International Finance - - - General

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  1. Adao, Bernardino & Correia, Maria Isabel Horta & Teles, Pedro, 2006. "On the Relevance of Exchange Rate Regimes for Stabilization Policy," CEPR Discussion Papers 5797, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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