Show simple item record Plante, Michael 2008-04-18T13:00:22Z 2008-04-18T13:00:22Z 2008-04-17
dc.description Revised version of en
dc.description.abstract This paper examines exchange rate management issues when a small open economy is hit by an exogenous oil price shock. In this model consumer durables play an important role in the demand for oil and oil based products as opposed to the traditional role of oil as a factor of production. When prices are sticky, oil price shocks lead to reduced output, lower inflation, and real exchange rate deprecation. These recessionary effects occur whether or not oil is in the production function because of the close relationship between consumer durables and oil. Tentative results suggest that flexible exchange rates produce smaller output losses and less volatile inflation in the non-tradables sector than fixed exchange rates but at the cost of front-loading real exchange rate movements. en
dc.format.extent 698435 bytes
dc.format.mimetype application/pdf
dc.language.iso en_US en
dc.publisher Center for Applied Economics and Policy Research en
dc.relation.ispartofseries CAEPR Working Papers en
dc.relation.ispartofseries 2008-007 en
dc.subject CAEPR en
dc.subject Center for Applied Economics and Policy Research en
dc.subject oil en
dc.subject durables en
dc.subject exchange rates en
dc.title Oil Price Shocks and Exchange Rate Management: The Implications of Consumer Durables for the Small Open Economy en
dc.type Working Paper en

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