Simulations of dynamic economies in "Exchange Rate Misalignment and External Imbalances: What is the Optimal Monetary Policy Response?"

Description

The excel file simulates the dynamic economies studied in the paper by Corsetti Dedola Leduc with the same title as the dataset, using the analytical solutions derived in the paper.

Steps to reproduce

Given the closed-form solutions obtained in the data, a simple excel file is an efficient way to simulate the dynamic economies under the optimal policy. One can use the file to explore the sensitivity of the solutions to parameters' values.

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