Currency Substitution, Foreign Inflation, and Terms-of-Trade Dynamics
在小型开放经济模型中引入理性预期、完全价格弹性和货币替代，并明确考虑外国通胀，发现货币扩张率上升时贸易条件稳态和动态路径均受影响，且进口需求弹性决定贸易条件是超调还是欠调。
This paper incorporates rational expectations, full price flexibility, and currency substitution into the usual small-economy model, taking explicit account of inflation abroad. Not only will the steady-state terms of trade be affected by an increase in the rate of monetary expansion when the inflation rate abroad is assumed to be nonzero, but its dynamic path may also be different from the usual case in which inflation abroad is ignored. It has been shown that if the import demands are relatively inelastic, the terms of trade will undershoot their equilibrium value; if the import demands are elastic, the terms of trade will overshoot. The key to these diametrically opposite results is the degree of ultimate deterioration in the terms of trade. Copyright 1989 by University of Chicago Press.