DP3540 | Dynamic General Equilibrium Analysis: The Open Economy Dimension

Publication Date

20/09/2002

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Abstract

This Paper discusses some key issues in the application of dynamic general equilibrium analysis to open economy modeling. In the context of the new open economy macroeconomics paradigm, we focus on: (i) the currency denomination of sticky prices; (ii) the role of the current account and net foreign assets; and (iii) the impact of fiscal policy.