The seminal work of Phelps, Taylor and Calvo developed forward-looking models of price determination that imparted inertia to the price level. These models incorporate expectations of future prices and excess demand by imposing constraints (typically lag-lead symmetry constraints) that force...

The long-term relation between the level of prices, the monetary aggregates(M1 and M2), and the exchange rate (TC) is investigated in this paper for the Costa Rican economy. An error-correction model is proposed to mimic the short-term dynamics. The cointegration technique is used to study the...

This paper uses the life-cycle approach to derive an equilibrium intratemporal efficiency condition which relates the marginal utility of consumption of nondurable goods and services to the marginal utility of consumption of services from durable goods. Given this condition and the assumption...