Jääskelä, Jarkko; Kulish, Mariano - Reserve Bank of Australia - 2007
The rational expectations equilibrium of a small open economy can be subject to indeterminacy if foreign monetary … monetary policy in a small open economy. In the canonical sticky-price small open economy model, we find that indeterminacy … small open economy model. If the <em>large</em> economy fails to anchor expectations, shocks to the small economy can affect …