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Technical note on "The real exchange rate in sticky price models: does investment matter?" Author info | Abstract | Publisher info | Download info | Related research | Statistics Enrique Martinez-Garcia
Jens Søndergaard
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This technical note is developed as a mathematical companion to the paper "The Real Exchange Rate in Sticky-Price Models: Does Investment Matter?" (GMPI working paper no. 17). It contains three basic calculations. First, we derive the equilibrium conditions of the model. Second, we compute the zero-inflation, zero-trade balance (deterministic) steady state. Third, we describe the log-linearization of the equilibrium conditions around the deterministic steady state. Simultaneously, we explain the system of equations that constitutes the basis for the paper to broaden its scope. Commentary is provided whenever necessary to complement the model description and to place into context the assumptions embedded in our DSGE framework.
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Paper provided by Federal Reserve Bank of Dallas in its series Globalization and Monetary Policy Institute Working Paper with number
16.
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Date of creation: 2008Date of revision:
Handle: RePEc:fip:feddgw:16Contact details of provider: Email: Web page: http://www.dallasfed.org/ More information through EDIRC
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Keywords: Globalization ; Foreign exchange ; International finance ; Forecasting ; Mathematical models ; References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.:
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Other versions: Warnock, Francis E., 2003.
"Exchange rate dynamics and the welfare effects of monetary policy in a two-country model with home-product bias ,"
Journal of International Money and Finance ,
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Lawrence J. Christiano & Martin Eichenbaum & Charles L. Evans, 2001.
"Nominal rigidities and the dynamic effects of a shock to monetary policy ,"
Working Paper Series
WP-01-08, Federal Reserve Bank of Chicago.
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Other versions:
Lawrence J. Christiano & Martin Eichenbaum & Charles Evans, 2001.
"Nominal Rigidities and the Dynamic Effects of a Shock to Monetary Policy ,"
NBER Working Papers
8403, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Lawrence J. Christiano & Martin Eichenbaum & Charles Evans, 2001.
"Nominal rigidities and the dynamic effects of a shock to monetary policy ,"
Working Paper
0107, Federal Reserve Bank of Cleveland.
[Downloadable!] Lawrence J. Christiano & Martin Eichenbaum & Charles L. Evans, 2005.
"Nominal Rigidities and the Dynamic Effects of a Shock to Monetary Policy ,"
Journal of Political Economy ,
University of Chicago Press, vol. 113(1), pages 1-45, February.
Lawrence J. Christiano & Martin Eichenbaum & Charles Evans, 2001.
"Nominal rigidities and the dynamic effects of a shock to monetary policy ,"
Proceedings ,
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[Downloadable!] V.V. Chari & Patrick J. Kehoe & Ellen R. McGrattan, 1998.
"Can sticky price models generate volatile and persistent real exchange rates? ,"
Staff Report
223, Federal Reserve Bank of Minneapolis.
[Downloadable!]
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V.V. Chari & Patrick J. Kehoe & Ellen R. McGrattan, 2000.
"Can Sticky Price Models Generate Volatile and Persistent Real Exchange Rates? ,"
NBER Working Papers
7869, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) V.V. Chari & Patrick J. Kehoe & Ellen R. McGrattan, 2002.
"Can sticky price models generate volatile and persistent real exchange rates? ,"
Staff Report
277, Federal Reserve Bank of Minneapolis.
[Downloadable!] Chari, V V & Kehoe, Patrick J & McGrattan, Ellen R, 2002.
"Can Sticky Price Models Generate Volatile and Persistent Real Exchange Rates? ,"
Review of Economic Studies ,
Blackwell Publishing, vol. 69(3), pages 533-63, July.
Calvo, Guillermo A., 1983.
"Staggered prices in a utility-maximizing framework ,"
Journal of Monetary Economics ,
Elsevier, vol. 12(3), pages 383-398, September.
[Downloadable!] (restricted)
Jón Steinsson, 2008.
"The Dynamic Behavior of the Real Exchange Rate in Sticky Price Models ,"
American Economic Review ,
American Economic Association, vol. 98(1), pages 519-33, March.
[Downloadable!]
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Enrique Martinez-Garcia & Jens Søndergaard, 2008.
"The real exchange rate in sticky price models: does investment matter? ,"
Globalization and Monetary Policy Institute Working Paper
17, Federal Reserve Bank of Dallas.
[Downloadable!]
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