A simple framework for international monetary policy analysis

• 成果类型: Article; Proceedings Paper
• 署名作者: Clarida, R; Galí, J; Gertler, M
• 署名单位: New York University; Columbia University; Centre de Recerca en Economia Internacional (CREI); Pompeu Fabra University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/S0304-3932(02)00128-9
• 发表日期: 2002
• 页码: 879-904
• 关键词: international monetary policy; Nash equilibrium; co-operation; marginal cost

摘要

We study the international monetary policy design problem within an optimizing two-country sticky price model, where each country faces a short run tradeoff between output and inflation. The model is sufficiently tractable to solve analytically, We find that in the Nash equilibrium, the policy problem for each central bank is isomorphic to the one it would face if it were a closed economy. Gains from cooperation arise, however, that stem from the impact of foreign economic activity on the domestic marginal cost of production. While under Nash central banks need only adjust the interest rate in response to domestic inflation, under cooperation they should respond to foreign inflation as well. In either scenario, flexible exchange rates are desirable. (C) 2002 Published by Elsevier Science B.V.