Intertemporal equilibrium optimizing models have recently become the standard framework for analyzing such macroeconomic issues as terms of trade, fiscal or trade policy, international transfers, supply...
When facing persistent balance of payments problems, some countries have resorted to a dual exchange rate system as an alternative to a uniform exchange rate adjustment. Typically under the dual system...
This paper examines the short-term and long-term effects of a nominal devaluation on the real exchange rate. It is shown that in the absence of supporting policies that limit increases in prices and factor...