Shi, Kang; Xu, Juanyi; Yin, Xiaopeng - In: Journal of International Money and Finance 51 (2015) C, pp. 26-46
This paper develops a small open economy model with sticky prices to show why a flexible exchange rate policy is not desirable in East Asian emerging market economies. We argue that weak input substitution between local labor and import intermediates in traded good production and extensive use...