Browsing by Author "Kimbrough, KP"

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Open Access
An examination of the effects of government purchases in an open economy
(Journal of International Money and Finance, 1985-01-01) Kimbrough, KP
This paper examines the effects of permanent and transitory changes in government purchases in the context of a model of a small open economy that produces and consumes both traded and nontraded goods. The model incorporates an equilibrium interpretation of the business cycle that emphasizes the responsiveness of agents to intertemporal relative price changes. It is demonstrated that transitory increases in government purchases lead to an appreciation of the real exchange rate and an ambiguous change (although a likely worsening) in the current account, while permanent increases have an ambiguous impact on the real exchange rate and no effect on the current account. When agents do not know whether a given increase in government purchases is permanent or transitory the effect is a weighted average of these separate effects. The weights depend on the relative variances of the transitory and permanent components of government purchases. © 1985.
Open Access
Exchange-rate policy and monetary information
(Journal of International Money and Finance, 1983-01-01) Kimbrough, KP
This paper develops a model of a small open economy in which the presence of local deviations from purchasing power parity give rise to differential information. It is assumed that the monetary authorities are committed to buy and sell foreign exchange in order to support an exchange-rate policy rule. It is demonstrated that exchange-rate policy can influence the distribution of real output (i) if agents possess incomplete and differential information and (ii) if they have contemporaneous money supply (or balance of payments) information. It is also shown that exchange-rate policy can be effective because of its ability to influence the information content of available monetary data. The argument is turned around and used to support the frequent release of monetary data. © 1983 Butterworth & Co (Publishers) Ltd.
Open Access
OPTIMAL MONETARY POLICIES AND POLICY INTERDEPENDENCE IN THE WORLD-ECONOMY
(JOURNAL OF INTERNATIONAL MONEY AND FINANCE, 1993-06) Kimbrough, KP
Open Access
PRICE, OUTPUT, AND EXCHANGE-RATE MOVEMENTS IN THE OPEN-ECONOMY
(JOURNAL OF MONETARY ECONOMICS, 1983) Kimbrough, KP
Open Access
Revenue maximizing inflation
(JOURNAL OF MONETARY ECONOMICS, 2006-11) Kimbrough, KP
Open Access
TARIFFS, INTEREST-RATES, AND THE TRADE BALANCE IN THE WORLD-ECONOMY
(JOURNAL OF INTERNATIONAL ECONOMICS, 1989-08) Gardner, GW; Kimbrough, KP
Open Access
The information content of the exchange rate and the stability of real output under alternative exchange-rate regimes
(Journal of International Money and Finance, 1983-01-01) Kimbrough, KP
When the exchange rate is flexible, and thus responds to market forces, it provides agents with useful information, while when it is fixed (by a feedback rule) it does not. The implications of this asymmetry for the stability of real output under the two regimes is discussed. It is shown that whenever shocks are predominantly of one variety, or when domestic monetary shocks accompanied by one real shock, a flexible exchange rate does a better job of stabilizing real output than does a fixed exchange rate. These results undermine arguments favoring fixed exchange rates because they 'discipline' monetary policy. In addition, it is demonstrated that managed floating rules and exchange rate feedback rules are irrelevant for the distribution of real output. © 1983.
Open Access
The optimum quantity of money rule in the theory of public finance
(Journal of Monetary Economics, 1986-01-01) Kimbrough, KP
This paper examines optimal tax policy in a monetary economy in which money serves as an intermediate good that helps facilitate the conversion of scarce resources into final consumption goods by enabling consumers to economize on the costs of transacting. It is shown that in such an environment, even though distorting taxes must be levied for revenue purposes, the optimal tax structure calls for abstaining from inflationary finance and adopting the optimum quantity of money rule. © 1986.