Foreign Indebtedness, Inflation and Exchange Rate Overshooting

Martin Zagler

Chapter 6 in Endogenous Growth, Market Failures and Economic Policy, 1999, pp 87-110 from Palgrave Macmillan

Abstract: Abstract Why are exchange rates more volatile than the nominal price level? Does the foreign debt increase or decline with national income? This chapter intends to give a theoretical answer to these two questions of international and monetary economic theory. The model setup in which these questions are treated is a standard representative agent utilitarian model, allowing for long-run growth due to constant returns to scale with respect to reproducible factors.

Keywords: Exchange Rate; Interest Rate; Monetary Policy; Capital Stock; Real Exchange Rate (search for similar items in EconPapers)
Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-27129-0_6

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DOI: 10.1007/978-1-349-27129-0_6

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