In its dynamic version the new benchmark combines the methodology of Dynamic Stochastic General Equilibrium models that came from the Real Business Cycles school with the new Keynesian nominal rigidities and gives sense to the effects of money on the real economy through a more realistic transmission mechanism.
In Canada, the debate about exchange rate regimes has been mainly among academic economists. But, with the decline of our currency against the US dollar through the 1990s, the exchange rate has also been raised as a concern in the business community when comparing our less-impressive economic performance with that of the United States.