Foreign Inflation Transmission under Flexible Exchange Rates and Currency Substitution
分析浮动汇率和货币替代下，外国通胀永久性意外上升对小型开放经济的动态和稳态影响，发现国内通胀路径取决于外币需求弹性。
The dynamic and steady-state effects of a permanent, unanticipated increase in foreign inflation on a small open economy are analyzed under flexible exchange rates and currency substitution. The velocity of domestic money, and consequently the domestic inflation rate, may rise along the transition path to steady state, but only if demand for foreign currency is sufficiently elastic such that the substitution from foreign to domestic money on impact is large. Higher foreign inflation is transmitted negatively when demand is inelastic. All else constant, a higher initial level of foreign real balances increases the magnitude of the transmission effects. Copyright 1990 by Ohio State University Press.