REAL EXCHANGE-RATE EFFECTS OF MONETARY DISTURBANCES UNDER DIFFERENT DEGREES OF EXCHANGE-RATE FLEXIBILITY - AN EMPIRICAL-ANALYSIS

We examine the effects of monetary policy on the real exchange rate. I n a cross-country analysis, we find that the variability of money shoc ks and the degree of informativeness of the exchange rate are importan t determinants of the magnitude of the real exchange rate effects of d omestic money shocks. Our results are consistent with previous cross-c ountry evidence on the output effects of money shocks but also highlig ht the role of the exchange rate regime.