Taylor rules and the Deutschmark-dollar real exchange rate:

"We explore the link between an interest rate rule for monetary policy and the behavior of the real exchange rate. The interest rate rule, in conjunction with some standard assumptions, implies that the deviation of the real exchange rate from its steady state depends on the present value of a...

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Bibliographic Details
Main Authors: Engel, Charles 1956- (Author), West, Kenneth D. (Author)
Format: Book
Language:English
Published: Cambridge, Mass. National Bureau of Economic Research 2004
Series:National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series 10995
Subjects:
Summary:"We explore the link between an interest rate rule for monetary policy and the behavior of the real exchange rate. The interest rate rule, in conjunction with some standard assumptions, implies that the deviation of the real exchange rate from its steady state depends on the present value of a weighted sum of inflation and output gap differentials. The weights are functions of the parameters of the interest rate rule. An initial look at German data yields some support for the model"--National Bureau of Economic Research web site.
Physical Description:22, [5] S. graph. Darst.

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