We study the effect of the zero bound constraint of interest rates on international transmission of economic policy and supply shocks. After some preliminary analysis with a simple theoretical model, we apply a rich two-country simulation model to the problem.The model framework consists of...

We study the effect of the zero bound constraint of interest rates on international transmission of eco-nomic policy and supply shocks. After some preliminary analysis with a simple theoretical model, we ap-ply a rich two-country simulation model to the problem. The model framework consists of...