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11-03-17-Monetary Policy and Devaluation

11-03-17-Monetary Policy and Devaluation - Policy VIa...

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Q STIG CA 0 1000 Y LM ms=5 CA e=.4 Policy VIa Monetary Policy Short Run (A .1 Increase In m s 0 ) STIG Start In Long-Run Equilibrium
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Q STIG CA 0 1000 Y 1100 LM’ ms= 5.1 LM ms=5 CA e=.4 Policy VIa Monetary Policy Short Run (A .1 Increase In m s 0 ) STIG The Shock
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Q STIG CA 0 1000 Y 1100 LM’ ms= 5.1 CA e=.4 Policy VIa Monetary Policy Short Run (A .1 Increase In m s 0 ) STIG The Triangle of Disequilibrium
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Q STIG CA 0 1000 Y 1100 LM’ ms= 5.1 CA e=.4 Policy VIa Monetary Policy Short Run (A .1 Increase In m s 0 ) STIG The Triangle of Disequilibrium
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Q Q flex, short run STIG CA 0 1000 Y 1100 LM’ ms= 5.1 CA e=.4 Policy VIa Monetary Policy Short Run (A .1 Increase In m s 0 ) STIG Q fix, short run The New Equilibrium Will Depend On The Exchange Rate Regime
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Q Q flex, short run STIG CA 0 1000 Y 1100 LM’ ms= 5.1 CA e=.4 Policy VIa Monetary Policy Short Run (A .1 Increase In m s 0 ) Fixed Exchange Rates STIG Q fix, short run The Fixed-Exchange-Rate-Regime Resolution Of The Disequilibrium LM” ms=5.0
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Q STIG CA 0 1000 Y CA e=.4 Policy VIa Monetary Policy Short Run (A .1 Increase In m s 0 ) Fixed Exchange Rates STIG Q fix, short run The New Equilibrium Under Fixed Exchange Rates LM” ms=5.0
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Q STIG CA 0 1000 Y CA e=.4 Policy VIa Monetary Policy Short Run (A .1 Increase In m s 0 ) Fixed Exchange Rates STIG Q fix, short run The New Equilibrium Under Fixed Exchange Rates Looks Just Like The Initial Equilibrium. The Difference Is That Now m s 0 = 5.1, But m s =5.0. LM” ms=5.0
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Q STIG CA 0 1000 Y CA e=.4 Policy VIa Monetary Policy Short Run (A .1 Increase In m s 0 ) Fixed Exchange Rates STIG Q fix, short run LM” ms=5.0 Since The Fixed Exchange Rate Equilibrium Is Still A (Short-, Intermediate-, And) Long-Run Equilibrium, There Are No Further Effects.
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Q STIG CA 0 1000 Y 1100 LM’ ms= 5.1 CA e=.4 Policy VIa Monetary Policy Short Run (A .1 Increase In m s 0 ) Flexible Exchange Rates STIG The Triangle of Disequilibrium
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Q Q flex, short run STIG CA 0 1000 Y 1100 20 LM’ ms= 5.1 CA e=.4 CA’ e=.467 Policy VIa Monetary Policy Short Run (A .1 Increase In m s 0 ) Flexible STIG The Flexible-Exchange-Rate-Regime Resolution Of The Disequilibrium.
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Q Q
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