This paper models three alternative policy strategies for an open economy and evaluates their performance. In the first regime national monetary policies are used to achieve domestic price stability, without supporting fiscal policy and without concern for external balance. The second regime...

The authors examine the implications for monetary policy design of including learning-by-doing effects in a macroeconomic model. They show that an inflation bias arises because monetary surprises may be exploited to maximize potential output by temporarily raising the rate of human capital...

Analyses of the Asian crisis of 1997 have focused excessively on the financial sector, especially the banks. The role of the real sector in exposing the financial system to stress has been under-emphasized. This paper provides a real-sector explanation for Thailand's crisis, demonstrating the...