Guirgui’s Orthodox model as an improvement and extension of the Dornbusch’s model. A new evidence in International Finance.

Dr Michel Zaki Guirguis 15/08/2014

Bournemouth University1

Institute of Business and LawFern BarrowPoole, BH12 5BB, UKTel:0030-210-9841550Mobile:0030-6982044429Email: guirguismichel@yahoo.co.uk

Biographical notes

I hold a PhD in Finance from Bournemouth University in the U.K. I have worked for several multinational companies including JP Morgan Chase and Interamerican Insurance and Investment Company in Greece. Through seminars, I learned how to manage and select the right mutual funds according to various clients needs. I supported and assisted the team in terms of six-sigma project and accounts reconciliation. Application of six-sigma project in JP Morgan Chase in terms of statistical analysis is important to improve the efficiency of the department. Professor Philip Hardwick and I have published a chapter in a book entitled “International Insurance and Financial Markets: Global Dynamics and Local Contingencies”, edited by Cummins and Venard at Wharton Business School (University of Pennsylvania in US). I am working on several papers that focus on the Financial Services Sector.

1 I have left from Bournemouth University since 2006. The permanent address of the author’s is, 94, Terpsichoris road, Palaio – Faliro, Post Code: 17562, Athens – Greece.

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Abstract

The Dornbusch’s model was an attempt to explain the reason of deviation of the exchange rates as a consequence that the purchasing power parity, (PPP), does not hold all the times. He tried to explain his model by combining macroeconomic indicators such the money supply with the exchange rate, domestic prices and domestic interest rates. In his model, he showed that the exchange rate overshoots and there can be a significant deviation from PPP. A possible explanation could be due to irrational speculation. The problem with this model is that it did not take into account inflationary expectations. Guirgui’s Orthodox model was an attempt to incorporate the Orthodox principles before designing the model. The Building blocks of the Greek Orthodox Church would help to achieve first spiritual integrity and design a model that will eliminate fluctuations and speculations.

Keywords: Dornbusch’s model, Guirgui’s Orthodox model, money supply, exchange rate, domestic prices, domestic interest rates.

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Introduction

Nowadays, we live in an age of global changes, cultural diversity and various religious beliefs that affect our lives in different but substantial degree. Every individual, firm, market and government panel has to adjust its behaviour and organisational attitude in order to survive, transmit and communicate properly in a national and international level. In an attempt, to co-ordinate various economic activities and achieve economic stability in the short and long-term without a clear positioning of a religious framework has created many financial and spiritual problems.

The question that arises is how religion and, specifically, Greek Orthodox Christianity could make a substantial contribution to safeguard the pure identity of mankind released from sins. In other words, how to increase our faith, get closer to God, safeguard our soul from the devil, integrate moral values such as self-respect, dignity, and mutual solidarity under an economic and competitive exchange rate market structure?

Dornbusch’s model was an attempt to model exchange rate with macroeconomic indicators as the purchasing power parity, (PPP), does not hold continuously and the good prices were not flexible in either direction on the IS – LM curve. Aggregate demand in the goods market is a function of expenditure, domestic income and domestic interest rate. The model is trying to adjust macroeconomic variables in relation to the exchange rate in order to keep equilibrium and PPP holds. Thus, increase in domestic prices leads to depreciation of exchange rate. The economy is at less than full employment. For example, an expansionary monetary policy will shift the LM curve to the right, while a contractionary monetary policy will shift it to the left. Increase in the money supply causes the interest rate to fall. The lower rate results to increased investment spending and, therefore, it raises national income. When the LM curve is vertical, then we have perfectly interest inelastic demand for money and the monetary policy is successful. Similarly, when the IS curve is horizontal, the perfectly interest – elastic investment, then monetary policy affect the equilibrium level of income and employment. Monetarists, claim that changes in the money supply affects directly aggregate demand. Their view contradicts Keynesians as they regard the fiscal policy to be a more effective tool in stimulating aggregate demand. The answer of the question of which view is correct is that both views lack the building blocks of the Orthodox Church.

The Orthodox view is that we can not trust and be totally sure that what we are thinking or saying is correct or good. The devil and the various demons could affect the will and ambition of the individual’s and captures him/her under a spirit of conceit or haughtiness. Lack of humility and the mixture of thoughts according to daily problems and circumstances create anxiety and despair, which should be avoided by continuous prays to Virgin Mary to intercede for us the sinners through her son Jesus Christ. Thus, every individual, household or politician, rich or poor should consult the Orthodox spiritual father and ask for blessing before making any decision that will affect individual demand and as a result aggregate demand in total. The guidance that we are getting from the spiritual father and the blessing are helping us to keep equilibrium in our consumption habits and therefore our real income will be used to satisfy basic needs that create equilibrium between demand and supply. As human

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wants are virtually unlimited, there should be a yardstick of what is important and what is not important. This yardstick will start to develop in their mind through the continuous supervision of the spiritual father. The distinction of thoughts in relation to prayer and fast will enable them through the time to understand how to balance their needs.

Another view of the Orthodox approach is the strong faith that every Christian should have. The faith inside the Orthodox Church is to love God with all your heart, soul, power and intellect part of your mind. This is the first commandment. The second commandment is to love your neighbour as you love yourself. The face of the fellow-citizen reflects the Holy Trinity. The first two commandments are very important to understand that the person is image or picture of God with ultimate objective to achieve resemblance. Then, the fiscal or monetary policy will be adapt to match the already equilibrium that was created from the intervention of the individual’s with the spiritual father and the Holy Mysteries of the Greek Orthodox Church. Under the Orthodox approach, there will be no wastage in terms of time and resources as the individual’s are fully motivated to achieve spiritual integrity and balance their economics with their spiritual needs. If macroeconomic policies continue to be formulated without the intervention of the Orthodox Church, then we will continue to see prostitutes, beggars, poor persons and individuals that are greedy, selfish and are focusing on excessive consumption that lead them away from the truth and love of the Holy Trinity and finally to the eternal hell. It is a sad but true reality that we are witnessing every day. These individuals did not find the right spiritual and financial support when it was needed and their socio-economic situation has deteriorated through the time. They were meeting wrong persons that did not have solid Orthodox and theological roots in addition to the intervention of the evil spirits. Thus, it is of paramount importance to include the Greek Christian Orthodox approach.

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The Dornbusch’s overshooting model

The overshooting model or exchange rate hypothesis was illustrated by Rudi Dornbusch in 1976. It was an effort to explain the drawback of the flexible price monetarist model. This model assumed that the purchasing power parity holds all the times and that good prices are as flexible upwards and downwards as exchange rates. But how we define the purchasing power parity? The purchasing power parity, (PPP), theory is related the law of one price. The PPP theorem can be viewed as the proposition that the law of one price will operate internationally. According to the law of one price, identical goods will sell for the same price between countries with the same currency. Price differentials persist because of market imperfections. Arbitrageurs faced with a price differential will buy in a low price market and sell in the higher price market and so make a riskless profit.

Since the departure from the Bretton Woods system to the flexible exchange rates, Dornbusch’s noticed that the purchasing power theory does not hold all the times and there are large gaps in time that deviate the exchange rate from PPP. His model was well known as the sticky – price monetarist model. The assumption of the model is that goods prices are sticky in the short run, while the prices of currencies are flexible in terms of arbitrage through the uncovered interest parity, (UIP) that holds all the times. In the short – term the exchange rate overshoots and they change constantly and rapidly. The fact of asymmetric information is not the main reason of this volatility, but the fact that there is no similar monetary and fiscal policy among countries with different currencies. The different policy that is adopted affect the money supply and the market will have to adjust to a new equilibrium. Due to the stickiness of prices of goods, wages are not affected immediately and prices adjust slowly in the short – run. As the time period passes, prices will adjust and be positively sloped in the long – run and smooth the volatility until they reach to a new equilibrium in the goods market.

The assumptions of the model are not realistic. It assumes that we operate in a small open economy that does not affect foreign interest rates, prices and output. There are flexible exchange rates and perfect capital mobility and perfect arbitrage of expected returns between domestic and foreign interest rate. Thus, if there is discrepancy between the two interest rates, then appreciation or depreciation will take place to reach equilibrium. I addition, it assumes that investors are risk neutral and domestic and foreign assets are perfect substitutes. In addition, in the goods market equilibrium schedule, it assumes zero price inflation.

According to Pilbeam (1998, pp170-171), the mathematical explanation of the Dornbusch’s model starts with a money demand function.

m – p = ny - σr (1)

Where:

m is the log of the domestic money stock.p is the log of the domestic price level.y is the log of domestic real income.r is the domestic interest rate.

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He assumed that domestic and foreign bonds are perfect substitutes, thus, the UIP condition holds.

E s=r−r¿ (2)

Where: E s is the expected rate of depreciation of the home currency.

According to Dornbusch’s model the purchase power parity, (PPP), exist only in the long –run and not all the time. Thus, we have:

s= p− p¿ (3)

Where s is the log of the long – run equilibrium exchange rate, p is the log of the

long – run domestic price level, and p¿

is the log of the long – run foreign price level.

In addition, the Dornbusch model states regressive exchange rate expectations as:

E s=θ ( s−s ) Where θ > 0 (4)

E s , which is the expected rate of depreciation of a currency is determined according to Pilbeam by the speed of adjustment parameter θ , and the gap between the current exchange rate s and its long – run equilibrium value s . According to him, if the spot rate is above s , then the exchange rate of the domestic currency will be expected to appreciate. In contrast, if the spot rate s is below s , then the exchange rate of the domestic currency is expected to depreciate.

Figure 1 shows Equilibrium in the Dornbusch model

Pricelevel PPP M G P1

G M

0 S1 Exchange rate

Source: Pilbeam Keith, (1998), International Finance. Second Edition. Macmillan Press Ltd.

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According to Pilbeam in Figure 1, the GG schedule is less steep than the PPP line because percentage rise in the price level will result to a greater percentage depreciation of the exchange rate. The money market schedule is given by MM and is assumed that is always in equilibrium.

The Guirgui’s Orthodox model

The main motivating factor that affects the balancing of demand and supply is the incorporation of the spiritual effort in pricing wages. The costs of production and operational risk of the firm will be reduced by adding the spiritual effort in the efficiency wage rate. Thus, we will not have to wait in the long run until to reach equilibrium level. This hypothesis contradict Dornbusch, (1976,a,b) exchange rate overshooting model that it states that wages in the labour market are determined in sticky – price markets, and they only tend to change slowly over time in response to various shocks such as changes in the money supply. Prices and wages are resistant to downward pressure. This hypothesis will be improved and extended, as the concept of satisfaction of human wants, which is related to aggregate demand, consumption, domestic income and expenditure should be positioned under the Orthodox Church. Thus, spiritual wants will eliminate physical needs and, therefore, there will be a balance between what can be produced and consumed. Thus, prices, wages and exchange rates will be adjusted to match the already equilibrium that was created from the intervention of the individual’s with the spiritual father and the Holy Mysteries of the Greek Orthodox Church. In other words, there will be a uniform Orthodox religious policy among the EU countries that eliminate the asymmetric shocks from adopting monetary and fiscal policy that was based in the past in other objectives and personal interests. There will be no time lags for readjustment and by eliminating consumption habits, government expenditure and increasing national saving and investment, there will be a surplus to help the poor persons, prostitutes, disabled and orphans.

To reach this level of economic policy, we have to make sure that we fully understand the building blocks of the Greek Orthodox Church and the arts and technique of manipulation of various thoughts.

The building blocks that constitute and sustain the faith of the Greek Orthodox Christian is the belief in the Holy Trinity, Holy communion, the powerful presence of Theotokos or Virgin Mary, the fleet of Saints in terms of hermits, ascetics, spiritual sacrifice, the David’s Psalms, Holy Bible, Byzantine music, fasting, the cross and the resurrection of Jesus - Christ.

The Holy Trinity is composed from the father, the son and the Holy Spirit. The unity in one person is not static but dynamic interrelation of the Holy Spirit under the roof of the grace of the son and the love of the father. The unity of the Holy Trinity supports you with harmony, love and peace of yourself, primarily, and then with the fellow - citizens and the environment.

The Holy Communion is an essential part of the Liturgy taken inside the church every Sunday and during celebration of Saints days. Repentance and confession, which constitute a second baptism, should take place before the Holy Communion. It helps the individual’s to strengthen his/her faith to the Holy Trinity and to protect him/her

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from the devil. If the individual commune the Divine Mysteries without the appropriate preparation that will be mentioned from the spiritual father then the sins become larger and worse.

Theotokos or Virgin Mary, the mother of Jesus-Christ, occupies an essential place in the heart of the Greek Orthodox Church. It symbolizes the second Eve and selected from God to continue the salvation of the mankind through her son, who represents the new Adam. She protects the Christian Orthodox from the various types of demons and encourages him/her during difficult times with patience and faith. For a more detailed analysis of the various types of demons, please refer to the book of Saint John Sinaet (2006), named the Ladder. Unfortunately, the ancestral sin of Adam has destroyed the divine relationship and created disequilibrium in balancing the evil from the good thoughts. This condition or tendency of the heart towards sin remains even after the baptism has removed the ancestral sin. The mystery of Chrisma, which follows the mystery of baptism, seals the newborn with the grace of the Holy Spirit. Thus, spiritual sacrifice with the grace of the Holy Spirit is the next step to stabilize the spiritual effort. It helps the person to reconcile and sustain a healthy mind through the examples of hermits, ascetics and Ηoly Fathers of the Greek Orthodox Church.

Spiritual sacrifice is defined in terms of rejecting personal will and following the will of God through the Ten Commandments. Fear, defined in a positive manner, not to break the commandments and keep an active ascetic profile is a substantial factor that keeps alive the faith towards God. At this point, it is worth to distinguish between obedience and pure discipline. Obedience created and based on love to approach God has complete different interpretation and result from the pure discipline that is cultivated and developed in other institutions. Obedience inside the Greek Orthodox Church has a positive and healthy characteristic. It is based on the freedom to approach the Holy Trinity through the applications of the Ten Commandments and continuous prays from the individual’s and the spiritual father. Pure discipline without religious characteristic has negative effects, as most of the time, is based on unbalancing power and imposition of force in a negative way to dominate on the situation. A good example, to mention is the Holy monk Porphyrios that teaches us to pray for our children and fellow - colleagues when we face a problem with them. The results will be much better by approaching the Theotokos rather than by believing or depending solely on our capabilities. Obedience will help the individual to achieve various stages of spiritual successes. In addition, the individual’s need to learn how to recognize, manipulate the thoughts by rejecting the bad and accepting the good ones. This can only be achieved through prays to the Holy Trinity, Virgin Mary and the help that you get from the spiritual father.

The David’s Psalms contain different types of hymn to God. For example, Psalm 50 is a prayer for forgiveness and Psalm 136 is a hymn of thanksgiving. The Holy Bible comprised from the Old and New Testament is an essential core of the base of the Greek Orthodox Church. They display the main event of prophets, Jesus-Christ, his mother and the apostles.

Byzantine music constitutes a fundamental part of the Greek Orthodox Church. The Divine Liturgy, Vespers, the hymns of David’s Psalms, The lamentations, the small and great canons of the Theotokos and the service of the supplicatory canons to Archangels and Saints are based on Byzantine music. The requirements to protect one

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of our sense gates, such as hear, favour this type of music. It is essential to protect us from the evil thoughts, as we will see in the later section of the manipulation of thoughts.

Fasting is an integrated and essential part of the life of the Greek Orthodox Christian. During the ecclesiastical year, there are various periods of fasts. The main fasts are Wednesday’s and Friday’s fast, the fast before the birth of Jesus-Christ, the fast of Great Lent, the fast during the month of August, which is concerned with Virgin Mary, the elevation of the cross. All fasts and especially the fast of Great Lent, which starts with the Publican and the Pharisee Gospel passage, help the individuals to strengthen their faith and spiritual effort through continuous repentances and prostrations. Fast should be avoided if the person faces bodily illness. To fast or not has to be discussed and solved with the help of the spiritual father.

The cross and resurrection constitute the base of the win of Jesus-Christ from death. They are based on the belief that your spiritual effort in this life is a continuous condition that will count after your death, and will have an eternal characteristic. Thus, after your death, you can not change anything in terms of your actions, good or bad, that were reflected in your attitude, behaviour and saying that were seen or unseen. Death is just a temporary change of status until the judgment day. Thus, if the spiritual effort and less the physical is based on the commandments, sincere and fair progress throughout the life of person, under the supervision of the spiritual father, then, there are increased chances to safeguard the purity of the soul. The fact that, the author’s use the expression increased chances is because the life of the individual’s until his/her death is a continuous effort to safeguard the will of God with ultimate objective to save his/her soul. Thus, there are many spiritual falls and illnesses of the soul that could be recovered through the mystery of repentance followed by confession.

On the other hand, if his/her effort was not based and blessed under the Holy Trinity and no confession took place in the whole phase of the life of the person, then, the reward will be eternal hell. By the term eternal hell, I mean the outer darkness, the unquenchable fire, the unsleeping worm and the gnashing of teeth followed by innumerable torments. Τhe remembrance of the term eternal hell helps tremendously every individual to obey better to the Ten Commandments and avoid a sinful lifestyle. The fact that the individual’s has compromised to stay in a sinful condition leads him/her to eternal hell. Thus, as God is love, it will be unfair to change the status or habits of the person and adapt him/her to new reality, namely, in the upper Jerusalem with the Saints. An excellent source of reference is the Sacred Augustine known as ‘the son of tears’. In the book written by Mperati (2005), there is a clear illustration of how poor decisions away from God can destroy the personality of the individual’s and how repentance can change his/her destiny towards spiritual salvation and preparation for the Kingdom of Heaven.

Thoughts constitute the invisible part of the mind of the person that is liable to the continuous flow of thousands of decisions that affect his/her life, the life of others and the results of his/her actions in the society. The organs constitute the human body and work in perfect harmony to sustain life. In a similar way, thoughts have to be regulated, structured and manipulated with the functioning of the heart to achieve equilibrium in terms of faith to the Holy Trinity. The problem is that after the

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ancestral sin, the mind has lost the initial pure functionality, which was to praise God and get divided into good, vain and evil thoughts. The biggest problem that we are facing, nowadays, is how to distinguish between them, balance them and isolate the evil thoughts that create substantial damage in our life in terms of the decisions that we take in a daily basis.

Vain thoughts are created from the relaxation of the mind that God is not an active observer in our lives, hearts and thoughts. The lack of faith and deviation from the basic necessities of life reinforce vanity thoughts at the expense of the peace of the soul. The successors of vain thoughts are evil thoughts that start to erode the building blocks of the soul until the final destruction of the healthy functionality of the mind and the corruption of heart with evil thoughts.

Evil thoughts are derived from external and internal causes. The external causes are related to five senses such as sight, hear, smell, taste, and touch. Each sense has to be carefully monitored and protected through holy gates that are installed to each one according to his/her spiritual effort to keep and implement precisely the will of God. Thus, according to the degree of your effort you get blessed and better protected from indecent sights, obscene words and irritated perfumes. In addition, the person manages to control excess and beyond necessity food and drink and improper touches of his/her body with soft materials. They result to relaxations of the body and creations of improper fantasies and sinful thoughts.

The internal causes of evil thoughts are related to imagination, passions, demons, and the already corrupted nature created after that the ancestral sin took place. Let’s analyze each cause. Imagination, which is fed mainly by sight and hears, affects the way by which we perceive, understand and structure the images around us. It also affects our future prospect, consumption habits, and ambitions. The stimulus that affect our senses and create an internal picture of the external world has to be based on religious background in terms of fast, prays, and consultation with the spiritual father in a continuous basis. If the stimulus is wrong, then they are going to create a malfunction of the mind and erosion of the soul with many negative effects. As a result of the acceptance of bad thoughts, we can mention minimum efficiency, spiritual pollution and therefore physical pollution of the environment.

Passions created outside the Greek Orthodox Church creates negative externalities with high costs as there is no balance between the various emotions such as love, hate, pleasure and pain. The faith inside the Orthodox Church is to love God with all your heart, soul, power and intellect part of your mind. This is the first commandment. The second commandment is to love your neighbour as you love yourself. The face of the fellow-citizen reflects the Holy Trinity. The first two commandments are very important to understand that the person is image or picture of God with ultimate objective to achieve resemblance. Thus, the various emotions are eliminated or better controlled as they are managed in line with the Commandments. Once the individual manage to get blessing from the application of the first two Commandments, then, he/she will progress towards the application of the remaining eight Commandments. Finally, the individual’s will get help to balance the various emotions with the help of the spiritual father and the examples that the Holy Fathers of the Greek Orthodox Church.

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Demons analyzed in an excellent way in the book of Saint John Sinaet (2006). This book is a masterpiece that teaches you the art to defend yourself from evil thoughts. He teaches you how to stop the various attacks and get out from the various snares that the demons are trying to set up around the individual’s heart. They are trying to steal the treasure from the inner part of the roots of the person heart with ultimate objective to lead and sustain him/her in a sinful situation until his/her death. Τhey try to take advantage from the fact that passions are recrudescent. Thus, they are trying to guarantee that the individual’s will get eternal hell rather than salvation of his/her soul.

Finally, it is the already corrupted human nature after the fall from paradise and recorded as the ancestral sin. The purity of the soul, intellect and innocent understanding of life has been eroded and shacked substantially. The evil thoughts started to occupy a predetermined place in the mind, heart and soul of various persons. The lack of proper faith, in terms of a Greek Orthodox Approach, that is trying to find an equilibrium point to reconcile the damage, has resulted to even worse results. People are loosing their identity in a daily basis. Globalization of different cultures, ideas and nationalities without an integrated roof of clear guidelines of a viable religious approach has created further complexity. The success of decisions making in terms of economic, social, and religious outcomes will have to be based upon our interaction with the Orthodox Church primarily. For a detailed analysis of the manipulation of thoughts and senses please refer to Saint Nikodemos the Hagiorite (1819).

The extension of the Dornbusch’s model based on the Orthodox model will start to be seen after each individual assimilate the building blocks of the Orthodox Church and achieve a successful balance of manipulation of thoughts. The Orthodox model will overcome the unrealistic assumptions of the Dornbusch’s model such as zero inflation, small open economy, domestic and foreign assets are perfect substitutes, and domestic prices are fixed in the short-run, perfect capital mobility and arbitrage. Thus, a given change in the money supply will not overshoot the exchange rate in the long – run. There will be no major volatility related to depreciation of the exchange rate from the short to the long – term. On the other hand, wages and prices will become more flexible and respond to the spiritual changes that have been incorporated from the Orthodox model. There will be less asymmetric information, and principal agent problems. For example, excessive domestic expenditure and undervaluation of the currency relative to PPP could be avoided by maximizing the spiritual integrity and the prays towards the Holy Trinity and the mother of Jesus Christ, the Holy and fully respected Theotokos and not Christotokos. The arbitrage effect could be avoided as spiritual efficiency will lead to allocative efficiency and, therefore, domestic goods will not be cheaper or expensive relative to the foreign goods. The standard of production will be similar in each country.

Another example is equation 4 of the Dornbusch model that states regressive exchange rate expectations as:

E s=θ ( s−s ) Where θ > 0 (4)

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E s , which is the expected rate of depreciation of a currency is determined according to Pilbeam by the speed of adjustment parameter θ , and the gap between the current exchange rate s and its long – run equilibrium value s . By integrating the Orthodox approach there will be no gap among the current exchange rate and its long – run equilibrium because as we have stated the equilibrium would have been achieved in an individual basis and the monetary policy in terms of money supply will not be affected by a large percentage, thus interest rates and prices will not be affected significantly that would create a significant appreciation or depreciation in the exchange rate market. In other words, there will be no significant changes to the left or right of the GG or MM in relation to the PPP of the Dornbusch’s overshooting model. The Orthodox model will bring stability, spiritual integrity, salvation of the soul, equilibrium and due to saving in a personal and national level surpluses in the balance of payment that will benefit the poor persons, the beggar’s, the prostitutes, the orphans, the widows, and any individual that is in a disadvantageous financial position.

Conclusion

There was an attempt to improve and extend Dornbusch’s model by incorporating the building blocks of the Greek Orthodox Church and the manipulation of thoughts in an effort to balance the spiritual with the economic decisions. The application of the Orthodox model is of paramount importance to minimize exchange rate volatility and stickiness of prices and wages. The Orthodox approach absorbs the asymmetric shocks in the monetary and fiscal policy that are caused from lack of faith to the Holy Trinity and to the Theotokos.

The politician’s and the individual’s or the household’s could work together to apply this approach. Each one by his/her turn by reaching spiritual and economic equilibrium, it will help to form a successful economic policy in an aggregate level that will favour the disabled, the poor’s, the prostitutes and the beggar’s to regain back their dignity, their respect, and their self-actualization. In other words, the collective effort will be aimed to help them gain and keep a better place inside the society that will facilitate to safeguard their moral values and save their souls.

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References

Dornbusch, R.,(1976a), Expectations and Exchange Rate Dynamics, Journal of Political Economy, vol.84, pp.1161 – 76.

Dornbusch, R.,(1976b), The Theory of Flexible Exchange Rate Regimes and Macroeconomic Policy. Scandinavian Journal of Economics, vol.84, pp.255-75.

Mperati Theodoros, (2005). The son of tears, (the Sacred Augustine). Edited by the theological brotherhood Sotir.

Pilbeam Keith, (1998), International Finance. Second Edition. Macmillan Press Ltd. pp.170 – 171.

Saint John Sinaet, (2006). The Ladder. Edited by the Holy monastery Paraklitou.

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