Foreign Inflation Transmission Under Flexible Exchange Rates And Currency Substitution
The dynamic and steady-state effects of a permanent, unanticipated increase in foreign inflation on a small open economy are analyzed under flexible exchange rates and currency substitution. The velocity of domestic money, and consequently the domestic inflation rate, may rise along the transition path to steady state, but only if demand for foreign currency is sufficiently elastic such that the substitution from foreign to domestic money on impact is "large." Higher foreign inflation is transmitted negatively when demand is inelastic. All else constant, a higher initial level of foreign real balances increases the magnitude of the transmission effects. Copyright 1990 by Ohio State University Press.
(This abstract was borrowed from another version of this item.)
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||1989|
|Contact details of provider:|| Postal: PENNSYLVANIA STATE UNIVERSITY, DEPARTMENT OF ECONOMICS, UNIVERSITY PARK PENNSYLVANIA 16802 U.S.A.|
Web page: http://econ.la.psu.edu/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:fth:pensta:3-89-7. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel)
If references are entirely missing, you can add them using this form.