Khan, Mohsin S., and Peter J. Montiel, “Growth-Oriented Adjustment Programs: A Conceptual Framework,” Staff Papers, International Monetary Fund (Washington), Vol. 36 (June 1989).
Polak, Jacques J., “Monetary Analysis of Income Formation and Payments Problems,” Staff Papers, International Monetary Fund (Washington), Vol. 6 (November 1957).
Mohsin S. Khan is Assistant Director in the Research Department. He is a graduate of Columbia University and the London School of Economics and Political Science.
Peter J. Montiel is Assistant Chief of the Developing Country Studies Division of the Research Department. He is a graduate of Yale University and the Massachusetts Institute of Technology.
In any financial programming exercise one would typically start with last period’s values. Furthermore, evaluating derivatives around an arbitrary point such as zero is standard procedure.