Ismail, Kareem; Arezki, Rabah - International Monetary Fund (IMF) - 2010
exchange rate movements. To do so, we introduce a Dutch disease model with downward rigidities in government spending to … revenue shock. This model leads to a decoupling between real exchange rate and commodity price movement during busts. We test … change in real exchange rate compared to capital spending. Second, we find that current spending is downwardly sticky, but …