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Persistent link: https://www.econbiz.de/10005132907
This paper presents a new argument for international monetary policy coordination based on considerations of structural asymmetries across countries. In a two-country world with a traded and a non-traded sector in each country, optimal independent monetary policy cannot replicate the...
Persistent link: https://www.econbiz.de/10005343021
We analyze optimal monetary policy in a small open economy characterized by home bias in consumption. Peculiar to our framework is the application of a Ramsey-type analysis to a model of the recent open economy New Keynesian literature. We show that home bias in consumption is a sufficient...
Persistent link: https://www.econbiz.de/10005706210
Most studies of optimal monetary policy under learning rely on optimality conditions derived for the case when agents …, and makes active use of, the learning algorithm agents follow in forming their expectations. In this setup, monetary … policy can influence future expectations through its effect on learning dynamics, introducing an additional tradeoff between …
Persistent link: https://www.econbiz.de/10005132608