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PrefaceAcknowledgments -- Introduction the political economy of currency choice -- A theory of currency policy …
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This paper studies Ramsey-optimal monetary and fiscal policy in a New Keynesian 2-country open economy framework, which is used to assess how far fiscal policy can substitute for the role of nominal exchange rates within a monetary union. Giving up exchange rate flexibility leads to welfare...
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their characteristics. Consistent with theory, the MPS is more procyclical in countries with floating exchange rates than …
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