Question: Suppose in the New Keynesian open economy model that there is

Suppose in the New Keynesian open-economy model, that there is an increase in future total factor productivity.
(a) Under a flexible exchange rate, what are the equilibrium effects? Should economic policy respond to the change in future productivity? If so, how?
(b) Now suppose that there is a fixed exchange rate. Repeat part (a).


View Solution:


Sale on SolutionInn
Sales0
Views50
Comments
  • CreatedDecember 05, 2014
  • Files Included
Post your question
5000