Small Open Economies Thrive with Flexible Exchange Rates, Boosting Growth and Prosperity.
The article explores how a small open economy grows in terms of money and investments. By using a model with two sectors and different types of goods, the researchers found that the choice of exchange rate regime affects how the economy changes over time. They also discovered that a one-sector model is not enough to understand how money and investments impact the economy. Overall, the study shows that sectoral differences play a crucial role in the growth of a small open economy.