scholarly journals Exchange Rate Dynamics in an Intertemporal General Equilibrium Model with Nominal Rigidities, Imperfect Competition, and Investments

1999 ◽  
Author(s):  
Allan B. Andersen
Keyword(s):  
Exchange Rate ◽  
General Equilibrium ◽  
Equilibrium Model ◽  
Imperfect Competition ◽  
General Equilibrium Model ◽  
Nominal Rigidities ◽  
Exchange Rate Dynamics

scholarly journals DISINFLATION AND EXCHANGE-RATE PASS-THROUGH

2008 ◽  
Vol 12 (2) ◽  
pp. 234-256 ◽  
Author(s):  
OZGE SENAY
Keyword(s):  
Exchange Rate ◽  
General Equilibrium ◽  
Equilibrium Model ◽  
Imperfect Competition ◽  
Exchange Rate Dynamics ◽  
Dynamic General Equilibrium Model ◽  
Short Run ◽  
The Exchange Rate ◽  
Pass Through ◽  
Exchange Rate Pass Through

This paper analyzes exchange-rate dynamics following a money-based disinflation under different degrees of exchange-rate pass-through. Using a microfounded dynamic general equilibrium model with imperfect competition and nominal rigidities, it is shown that a monetary slowdown causes an appreciation of the exchange rate and a short-run fall in employment. Varying the degree of pass-through, however, significantly alters the magnitudes of these effects. As the degree of pass-through is reduced, the extent of the short-run appreciation of the exchange rate increases and the short-run impact of the disinflation on employment falls.

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