Market deregulation and optimal monetary policy in a monetary union

• 成果类型: Article
• 署名作者: Cacciatore, Matteo; Fiori, Giuseppe; Ghironi, Fabio
• 署名单位: Universite de Montreal; HEC Montreal; North Carolina State University; University of Washington; University of Washington Seattle; Centre for Economic Policy Research - UK; National Bureau of Economic Research
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2015.11.002
• 发表日期: 2016
• 页码: 120-137
• 关键词: Market deregulation; monetary union; optimal monetary policy

摘要

This paper addresses the consequences of product and labor market deregulation for monetary policy in a two country monetary union with endogenous product creation and labor market frictions. We show that when regulation is high in both countries, optimal policy requires significant departures from price stability both in the long run and over the business cycle. The adjustment to market reform requires expansionary policy to reduce transition costs, but deregulation reduces static and dynamic inefficiencies, making price stability more desirable once the transition is complete. International synchronization of reforms can eliminate policy tradeoffs generated by asymmetric deregulation. (C) 2015 Elsevier B.V. All rights reserved.