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The U.S. Current Account Deficit and the Expected Share of World Output
This paper investigates the possibility that the large current account deficits of the United States are the outcome of optimizing behavior. It develops a simple long-run world equilibrium model in which the current ...
Taylor Rules and the Deutschmark Dollar Real Exchange Rate
The authors explore the link between an interest rate rule for monetary policy and the behavior of the real exchange rate. The interest rate rule, in conjunction with some standard assumptions, implies that the ...
Expectations and Exchange Rate Policy
Empirical evidence and theoretical discussion have long emphasized the impact of "news" on exchange rates. In most exchange rate models, the exchange rate acts as an asset price and, as such, responds to news about ...