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Social and Behavioral Sciences Commons™

Open Access. Powered by Scholars. Published by Universities.®

Economics

2010

F41

Articles 1 - 2 of 2

Full-Text Articles in Social and Behavioral Sciences

(Wp 2009-02) Exchange-Rate Pass Through, Openness, And The Sacrifice Ratio, Joseph P. Daniels, David D. Vanhoose Jan 2010

(Wp 2009-02) Exchange-Rate Pass Through, Openness, And The Sacrifice Ratio, Joseph P. Daniels, David D. Vanhoose

Economics Working Papers

Considerable recent work has reached mixed conclusions about whether and how globalization affects the inflation‐output trade‐off and suggests that the ultimate effect of openness on the output‐inflation relationship is influenced by a variety of factors. In this paper, we consider the impact of exchange‐rate pass through and how pass through conditions the effect of openness on the sacrifice ratio. We develop a simple theoretical model showing how both the extent of pass through and openness can interact to influence the output‐inflation relationship. Next we empirically explore the nature of these two variables and their interaction. Results indicate that greater pass …

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The Great Depression In Belgium: An Open-Economy Analysis, Luca Pensieroso Dec 2009

The Great Depression In Belgium: An Open-Economy Analysis, Luca Pensieroso

Luca Pensieroso

This paper studies the Great Depression in Belgium within the open-economy dynamic general equilibrium approach. Results from the simulations show that a two-good model with total factor productivity shocks and nominal exchange rate shocks can account for most of the 1929-1934 output drop. The data mimicking ability of the model is good along other dimensions as well, most notably hours worked, the consumption price index and the terms of trade. The model is also able to catch some of the dynamics of imports and exports.

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