麻烦大家看一下这道题：

The algebra of exchange rate overshooting.Consider a simplified open-economy model:m-p=hy-ki,y=b(ε-p)-a(i-p^),i=ε^,p^=θy.the variables y,m,p andεare the logs of output,money,the price level,and the exchange rate,respectively;I is nominal interest rate,and p^ is inflation.All variables are expressed as deviations from their usual values;P* and i* are normalized to 0,and are therefore omitted.The main changes from our usual model are that price adjustment takes a particularly simple form and that the equations are linear.h,k,b,a and θre all positive.

Assume that initially y=i=p^=m=p=0.Now suppose that there is a permanent increase in m

(a) Show that once price have adjusted fully (so p^=0),y=i=0,and p=ε =m.

(b) Show that there are parameter values such that at the time of increade in m,εjumps immediately to exactly m and then remains constant,so that there is neither overshooting nor undershooting.

谢谢！