“…The basic version of the tradable-nontradablegoods-model is a partial equilibrium model; however, it has repeatedly been incorporated in large scale macroeconomic models (Anderson et al, 2013;Kumhof, Muir, Mursula, & Laxton, 2010). The approach is prominently and increasingly used in studies on exchange rate fluctuations (Benigno & Thoenissen, 2008;Burstein, Eichenbaum, & Rebelo, 2006;Corsetti, Dedola, & Leduc, 2008;Dotsey & Duarte, 2008;Engel, 1999;Ruscher, Wolff, European Commission, & Directorate-General for Economic and Financial Affairs, 2009).…”