Polityka gospodarcza w modelu cen i kursu walutowego
Economic Policy in the Model of Prices and Exchange Rate

Summary/Abstract: This paper presents a two-sector model of prices and exchange rate, belonging to the mainstream of mathematical economics. The model operates under floating exchange rate regime. The model is given in the system form of two first order differential equations with respect to prices of tradables and non-tradables. Using the model we show the main transmission channels of economic policy – monetary, fiscal and wage – on prices and real exchange rate in terms of production divided into tradables and non-tradables goods.

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