Exchange rate dynamics, asset market structure and the role of the ...

1.6
1.4
1.2
σ T
1
corr(RS, c-c*)
0.8
0.6
ρ T
0.4
0.2
0
-0.2
corr(y-y*)-corr(c-c*)
-0.4
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1
θ
Figure 4 Same experiment as in figure 1, assuming domestic investment is 75% made up of home
produced intermediate goods ψ = 0.75.