Many international macroeconomic models link the real exchange rate to a ratio of marginal utilities. We examine this link empirically, allowing the marginal utility of consumption to depend on government expenditure, real money balances, or external habit. We also consider two environments with...

During a currency crisis, speculators usually do not know the value of a central bank's foreign exchange reserves. In this paper I show that modelling speculators as having imperfect knowledge of reserves enriches the predictions of the classical model of speculative attacks. With realistic lags...

The authors examine hypotheses about the relation between provisional estimates and final values of M1, M2, and M3, and their growth rates in Canada, using monthly data and multiple revisions. Preliminary values cannot be viewed as final values plus an error (revision) uncorrelated with these,...

What explains the widespread fear of deflation? This article reviews the history of thought, economic history, and empirical evidence on deflation, with a view to answering this question. It also outlines informally the main effects of deflation in applied monetary models. The main finding is...