... y-maximizing framework, Journal of MonetaryEconomics 12, 383-398.Cavallo, M., and F. Ghironi (2002), Net foreign assets and the exchange rate: reduxrevived, Journal of Monetary Economics 4 9 (2002), ... toforeign consumption, and therefore to the real exchange rate and thus output (see alsoSchmitt-Grohé and Uribe, 2002). As we want to present results for a version with perfectinternational ... values (see Blanchard and Kahn, 1980).Since trace(A)=ρ > 0 and det(A)=(1− ϑ) ψ(α − 1),thisisfulfilled with α > 1,whilein the opposite case (α < 1) there is one stable and one unstable eigenvalue.¥Th...