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This paper estimates simultaneously dynamic equations for the Deutsche Mark/Dollar exchange rate and the German wholesale price index, which emerge from a model in which German prices are sticky. This stickiness is due to price adjustment costs which take the form posited by Rotemberg(1982).The...
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This chapter reviews the international aspects of monetary policy and presents the classical model of the open economy. The operation of the gold standard, the pricespecie flow mechanism, purchasing power parity, and the monetary approach to the balance of payments are illustrated in the...
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