Target zones and wealth effects: Current account implications of alternative policy assignments
This paper evaluates the current-account implications of coordinated disinflationary policy in a two-country framework, when fiscal policy is assigned to control inflation and monetary policy is used to hold down the exchange rate at its â€œtarget zoneâ€ level. The performance of an alternative regime, where monetary policy controls inflation and fiscal policy is assigned to control the current account is also assessed. Copyright Kluwer Academic Publishers 1991
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- Kouri, Pentti J K, 1976. " The Exchange Rate and the Balance of Payments in the Short Run and in the Long Run: A Monetary Approach," Scandinavian Journal of Economics, Wiley Blackwell, vol. 78(2), pages 280-304.
- Whittaker, Rod, et al, 1986. "Alternative Financial Policy Rules in an Open Economy under Rational and Adaptive Expectations," Economic Journal, Royal Economic Society, vol. 96(383), pages 680-95, September.
- Edison, Hali J. & Miller, Marcus H. & Williamson, John, 1987. "On evaluating and extending the target zone proposal," Journal of Policy Modeling, Elsevier, vol. 9(1), pages 199-224.
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