The optimal monetary policy response to exchange rate misalignments

A common feature of exchange rate misalignments is that they produce a divergence between traded and non-traded goods sectors, leading to pressures on monetary policy makers to react. In this paper we develop a small open economy model which features traded and non-traded goods sectors with which to...

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Bibliographic Details
Main Authors: Wren-Lewis, S, Leith, C
Format: Working paper
Published: University of Oxford 2007