tony7135
tony7135
10.03.2020 • 
Social Studies

Assume also that goods prices are sticky in the short run. Suppose the US central bank implements a contractionary monetary policy in a permanent fashion, and market participants correctly anticipate this policy two months in advance. Use the MM-FX model to explain changes in the dollareuro exchange rate in the short run and the long run. Is there exchange rate overshooting?

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