Backus and Smith name the observation that the correlation between these values and consumption are non-positive. Volatility in these values arises due to the interaction between changes in monetary policy and sticky prices according to Dornbusch's overshooting hypothesis. Nominal interest rates are related to these quantities according to Fisher's open market hypothesis. Deviations from these quantities' "real" value from one accounts for differences in (*) purchasing power parity. Tobin taxes are designed to minimize fluctuations in these quantities; those fluctuations are minimized in schemes that use pegging. For 10 points, name these quantities that were fixed by the Bretton Woods Conference, which compare the values of different curre
Backus and Smith name the observation that the correlation between these values and consumption are non-positive. Volatility in these values arises due to the interaction between changes in monetary policy and sticky prices according to Dornbusch's overshooting hypothesis. Nominal interest rates are related to these quantities according to Fisher's open market hypothesis. Deviations from these quantities' "real" value from one accounts for differences in (*) purchasing power parity. Tobin taxes are designed to minimize fluctuations in these quantities; those fluctuations are minimized in schemes that use pegging. For 10 points, name these quantities that were fixed by the Bretton Woods Conference, which compare the values of different currencies to each other.
Backus and Smith name the observation that the correlation between these values and consumption are non-positive.