Download or read book Three Essays on Monetary Policy in Small Open Economies written by Kai L. Chan and published by . This book was released on 2008 with total page 380 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the second chapter, a model with nominal wage rigidities is combined with the assumption that all goods are traded in the new open economy framework to derive an outcome where the home country has a strong bias towards its own good. Then it is shown that, under broad assumptions of the parameters of the model, overshooting is a consequence when interest elasticity of money demand is less than unity.