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International policy coordination and simple monetary policy rules /
This paper studies the optimal design of monetary policy in an optimizing two-country sticky price model. We suppose that the production sequence of final consumption goods stretches across both countries and is associated with vertical trade. Prices of final consumption goods are sticky in the cons...
| Clasificación: | Libro Electrónico |
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| Autores principales: | , |
| Autor Corporativo: | |
| Formato: | Electrónico eBook |
| Idioma: | Inglés |
| Publicado: |
[Washington, D.C.] :
International Monetary Fund, Research Dept.,
©2006.
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| Colección: | IMF working paper ;
WP/06/164. |
| Temas: | |
| Acceso en línea: | Texto completo |
| Sumario: | This paper studies the optimal design of monetary policy in an optimizing two-country sticky price model. We suppose that the production sequence of final consumption goods stretches across both countries and is associated with vertical trade. Prices of final consumption goods are sticky in the consumer's currency. Pursuing an inward-looking policy, as suggested in recent work, is not optimal in this set-up. We also ask which simple, i.e. non-optimal, targeting rule best supports the welfare maximizing policy. The results hinge critically on the degree of price flexibility and the relative importance of cost-push and productivity shocks. In many cases, a strict targeting of price indices like producer or consumer price indices is dominated by rules that allow for some fluctuations in prices such as nominal income or monetary targeting. |
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| Descripción Física: | 1 online resource (26 pages) : illustrations |
| Bibliografía: | Includes bibliographical references. |
| ISBN: | 1283515857 9781283515856 9781451985009 1451985002 1462358888 9781462358885 1452792526 9781452792521 9786613828309 6613828300 |
| ISSN: | 2227-8885 ; |