Opening the economy maintaining the level of employment and foreign exchange policy upside down
Abstract
The purpose of this paper is to demonstrate under which circumstances a policy
designed to open the economy may not succeed in changing employment level. This kind
of circumstances happens because in this model it is considered both internal and external
dynamics to a correct arbitrage of real exchange rate.
JEL Classification: F16; F13; F43.
Keywords: Liberalization trade opening exchange rate inflation