Money, banking, and the determination of real and nominal exchange rates

• 成果类型: Article
• 署名作者: Betts, CM; Smith, BD
• 署名单位: Cornell University; Federal Reserve System - USA; Federal Reserve Bank - Minneapolis
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.2307/2527288
• 发表日期: 1997
• 页码: 703-734
• 关键词: one price; MODEL; liquidity; GOODS

摘要

We consider a model where spatial separation, limited communication, and stochastic relocation create a role for banks and country-specific currencies. The same factors also permit a deviation from the law of one price. We examine how monetary policies influence real and nominal rates of exchange and real and nominal rates of interest under both fixed and flexible exchange rate regimes. We also demonstrate that both regimes are characterized by an indeterminacy of both the real and the nominal rate of exchange.