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Habits and Durability in Consumption, and the Effects of Exchange Rate Policies

Author

Listed:
  • Arman Mansoorian

    (York University, Canada)

  • Simon Neaime

    (York University, Canada)

Abstract

A model in which consumption exhibits durability, and habits develop over the flow of services provided by them, is used to study the effects of exchange rate policies. The results of recent studies with regard to the effects of exchange rate policies are brought closer to some recent empirical findings. It is shown that, after a change in the rate of devaluation, the adjustment of consumption, real money holdings, and the country's net foreign asset position will very likely be non-monotonic.

Suggested Citation

  • Arman Mansoorian & Simon Neaime, 1996. "Habits and Durability in Consumption, and the Effects of Exchange Rate Policies," Working Papers 1996_06, York University, Department of Economics.
    • Handle: RePEc:yca:wpaper:1996_06
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    File URL: ftp://dept.econ.yorku.ca/pub/working_papers/96-06.pdf
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    References listed on IDEAS

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    Cited by:

    1. Neaime Simon, 2005. "Financial Market Integration and Macroeconomic Volatility in the MENA Region: An Empirical Investigation," Review of Middle East Economics and Finance, De Gruyter, vol. 3(3), pages 59-83, December.
    2. Simon Neaime, 2008. "Monetary Policy Transmission and Targeting Mechanisms in the MENA Region," Working Papers 395, Economic Research Forum, revised 03 Jan 2008.

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    More about this item

    Keywords

    Habits; Durability in Consumption; Exchange Rate Policies;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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