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Nontraded goods and the balance of trade in a neo-Keynesian temporary equilibrium

Abstract:

This paper explores the implications for international monetary economics of recent work on macroeconomic models of temporary equilibrium with rationing. A model of a small open economy is presented, which, though fully consistent in the long run with the monetary approach to the balance of payments, behaves very differently in the short run when the wage and the price of nontradeables are sticky. Among the comparative statics properties of the model are the following: a devaluation may not i...

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Publication status:
Published
Peer review status:
Peer reviewed

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Institution:
University of Oxford
Division:
SSD
Department:
Economics
Research group:
Industrial Economics
Oxford college:
Merton College
Role:
Author
Publisher:
John Wiley & Sons
Journal:
Quarterly journal of economics
Volume:
95
Issue:
3
Pages:
403-429
Publication date:
1980-11-01
ISSN:
0033-5533
Language:
English
Keywords:
Subjects:
UUID:
uuid:ad00813a-e067-4aec-884f-5da23e11b728
Local pid:
ora:2231
Deposit date:
2008-08-12

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