SorianoMorales, Yazmín Viridiana and VallejoJiménez, Benjamín and VenegasMartínez, Francisco (2017): Impact of the Degree of Relative Risk Aversion, the Interest Rate and the Exchange Rate Depreciation on Economic Welfare in a Small Open Economy.

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Abstract
This paper is aimed at assessing the impact of the degree of relative risk aversion on economic welfare for different levels of the interest rate and the exchange rate depreciation in a small open economy. To do this, a representative consumerproducer makes decisions on consumption, money balances, and leisure. In order to find a closedform solution of the household’s economic welfare, it is assumed that individual’s preferences belong to the family of Constant Relative Risk Aversion (CRRA) utility functions. Several comparative statics graphical experiments about the effects of the degree of relative risk aversion on economic welfare for different levels of nominal variables are carried out. Finally, we find that, under the stated assumptions, household’s economic welfare seen as a function of the degree of relative risk aversion is responsive to different values of nominal variables.
Item Type:  MPRA Paper 

Original Title:  Impact of the Degree of Relative Risk Aversion, the Interest Rate and the Exchange Rate Depreciation on Economic Welfare in a Small Open Economy 
Language:  English 
Keywords:  Consumerproducer economics, economic welfare, degree of relative risk aversion, small open economy, interest rate, foreign exchange. 
Subjects:  E  Macroeconomics and Monetary Economics > E4  Money and Interest Rates > E43  Interest Rates: Determination, Term Structure, and Effects F  International Economics > F3  International Finance > F31  Foreign Exchange 
Item ID:  76441 
Depositing User:  Dr. Francisco VenegasMartínez 
Date Deposited:  27 Jan 2017 08:44 
Last Modified:  27 Sep 2019 15:14 
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URI:  https://mpra.ub.unimuenchen.de/id/eprint/76441 