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Exchange Rate Policy When the Labour Market Exhibits Hysteresis

Frank Barry

The Manchester School of Economic & Social Studies, 1998, vol. 66, issue 5, 532-49

Abstract: This paper analyzes effects of exchange rate changes in a small open economy whose labor market exhibits hysteresis. The model is used to critique the response of the Irish authorities to the exchange rate crisis of 1992-93 that resulted from the sharp depreciation of sterling relative to the deutsche mark and the Irish pound. Copyright 1998 by Blackwell Publishers Ltd and The Victoria University of Manchester

Date: 1998
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