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This paper examines inflation dynamics in the current EU-accession countries in central and eastern Europe, focusing … particularly on the determinants of "dual inflation", that is, diverging inflation rates for tradable and non-tradable goods. The …, indeed, finds evidence of "dual inflation" in these economies. To test empirically for underlying determinants, the paper …
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In the famous debate between Keynes and Ohlin on the transfer problem, the interaction between non-traded goods and unemployment complicates the analysis considerably. We analyze these issues using four different models to conclude that Keynes's concern regarding the large burden imposed on...
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This paper uses a DSGE model of two small open economies to explain certain features of real exchange rate cyclical fluctuations in countries with fixed and flexible exchange rates, focusing on the role of traded and non-traded goods prices. In particular, the model illustrates why the relative...
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We discuss how the welfare ranking of fixed and flexible exchange rate regimes in a New Open Economy Macroeconomics model depends on the interplay between the degree of exchange rate pass-through and the elasticity of substitution between home and foreign goods. We identify combinations of these...
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