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Long Swings In The Exchange Rate And The Excess Returns Puzzle: The Ro
Essay specific features
Written by:
James B
Date added:
July 3, 2015
Level:
University
Grade:
B
No of pages / words:
2 / 489
Was viewed:
413 times
Rating of current essay:
Essay content:
The uncertainty of a switch occurring in a regime (the Peso Problem) is
an interest-ing form within which to embed the imperfect information. It is a
format that seems ready to ex-pand into many other areas of economic modeling in
which expectations are at the core of the model's dynamics.
Of course, the choice of the benchmark is key to the mechanics of the process...
displayed 300 characters
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In the paper, the authors note that if PPP holds, "relative
excess demand for domestic and foreign goods is zero." The obvious suggestion,
based on the model, is that the flow of goods and services is the foundation for
the equilibrating dynamic. Behind the flow of goods and services is the gap
between the gap between, domestic and foreign short-term rates, and the steady
state long-run interest rate gap that sets goods flows to zero...
displayed 300 characters
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