Chang, Roberto (contributor); Velasco, Andrés (contributor) - 2004
exchange rate
policy matters through two channels: as in textbook models, in the presence of
external shocks, �exible exchange … exchange rate policy chosen by a benevolent central bank depends
1
See also Calvo (1999, 2000) and Krugman (1999, 2000)
2
on … domestic borrowers and, hence,
by expectations of exchange rate policy.
The equilibrium outcome of this interaction is an …