Global monetary policy under a dollar standard

• 成果类型: Article
• 署名作者: Devereux, Michael B.; Shi, Kang; Xu, Juanyi
• 署名单位: Simon Fraser University; University of British Columbia; Chinese University of Hong Kong
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2005.12.007
• 发表日期: 2007
• 页码: 113-132
• 关键词: dollar standard; reference currency; asymmetric pricing; monetary policy; welfare

摘要

This paper derives an optimal monetary policy in a world with a dollar standard, defined as an environment in which all traded goods prices are set in US dollars, so that exchange rate pass-through into the US price level is zero. We show that the US is essentially indifferent to exchange rate volatility, while the rest of the world places a high weight on exchange rate volatility. In a Nash equilibrium of the monetary policy game, US preferences dominate; the equilibrium is identical to one where the US alone chooses world monetary policy. Despite this, we find surprisingly that the US loses from the dollar's role as an international currency, since the absence of exchange rate pass-through leads to inefficient expenditure allocations within the US. Finally, we derive the conditions for a dollar standard to exist. (c) 2006 Elsevier B.V. All rights reserved.