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Exchange Rate Policy When The Labour Market Exhibits Hysteresis
Author(s) -
Barry Frank
Publication year - 1998
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/1467-9957.00123
Subject(s) - economics , depreciation (economics) , hysteresis , irish , pound (networking) , exchange rate , small open economy , labour economics , keynesian economics , monetary economics , macroeconomics , market economy , linguistics , philosophy , physics , capital formation , quantum mechanics , financial capital , world wide web , computer science , human capital
The effects of exchange rate changes in a three‐sector small open economy are analysed, first under full employment and then under conditions of labour‐market 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 deutschmark and the Irish pound.