We construct a two-period model of an open economy and use the model to analyze the welfare implications of fixed and floating exchange regimes. Consumers have perfect foresight and save by holding domestic and foreign bonds, which are chosen according to relative interest rates, deflated by the...

This paper develops a methodology for evaluating the short-run welfare implications of different exchange rate regimes. Heterogeneous, optimizing domestic consumers live for two periods, consume goods and leisure, supply labor, save home and foreign bonds, and demand currency. Firms maximize...

We construct a dynamic model of the Australian economy that has a regional sub-section representing Western Australia. Within the West Australia sub-economy, there is a separate technology for the gold mining industry. We implement the model, and simulate a 2.5 percent tax on gold exports. The...