Abstract
This paper investigates real income and exchange rate dynamics based on the Mundell-Fleming model. Assuming anticipated versus unanticipated monetary expansions we consider the corresponding adjustment processes of the economy (for different lags in the implementation of the policy). We show that there is a trade-off between the speed of adjustment intendet by the policy maker and the jump in the exchange rate the policy maker is faced when choosing among different implementation lags.
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© 1999 Springer-Verlag Berlin Heidelberg
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Kähler, T., Karmann, A. (1999). Exchange Rate Dynamics under Announcement versus Discretion: a Turnpike Approach. In: Gaul, W., Schader, M. (eds) Mathematische Methoden der Wirtschaftswissenschaften. Physica, Heidelberg. https://doi.org/10.1007/978-3-662-12433-8_35
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DOI: https://doi.org/10.1007/978-3-662-12433-8_35
Publisher Name: Physica, Heidelberg
Print ISBN: 978-3-662-12434-5
Online ISBN: 978-3-662-12433-8
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