This paper utilizes a profit maximizing banking model to analyze sweeping behavior. Comparative statics results indicate that sweeping responds positively to increases in bank loan rates and reserve ratios and negatively to increases in the interest rate on reserves or to exogenous increases in...

This article considers a transition toward European monetary union that combines increased substitution of currencies and greater monetary, financial, and fiscal policy coordination. It explores how such a transition would affect national inflation and interest rates and required reserve ratios...

During the past two decades, a growing body of research has explored the implications of increased trade and financial openness for the relationship between output and inflation. This paper reviews proposed theoretical channels through which the degree of openness might ultimately affect the...

This paper surveys the literature that uses two-country models to analyze monetary and fiscal policy issues faced in interdependent economies. We discuss sources of structural interdependence that researchers typically include in these models. We describe many of the types of policy interactions...

This paper develops a model of an open economy containing both sectors in which wages are market-determined and sectors with wage-setting arrangements. A portion of the latter group of sectors coordinate their wages, taking into account that their collective actions influence the equilibrium...

Considerable recent work has reached mixed conclusions about whether and how globalization affects the inflation–output trade-off and suggests that the ultimate effect of openness on the output–inflation relationship is influenced by a variety of factors. In this paper, we consider the...