Currency areas, international monetary regimes, and the employment-inflation tradeoff

• 成果类型: Article; Proceedings Paper
• 署名作者: Ghironi, F; Giavazzi, F
• 署名单位: University of California System; University of California Berkeley; Bocconi University
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/S0022-1996(98)00029-4
• 发表日期: 1998
• 页码: 259-296
• 关键词: currency areas; size; international monetary regimes; employment-inflation tradeoff

摘要

We show that the employment-inflation tradeoff facing a central bank depends on the size of the economy for which it sets monetary policy. For inflation-averse central banks, the tradeoff improves the smaller the relevant economy. The tradeoff facing the region whose central bank controls the exchange rate in a managed exchange rate regime does not change moving to a symmetric flexible exchange rate regime. Instead, the core region in an asymmetric regime faces a worse tradeoff than under flexible exchange rates. Equipped with these results, we explore the issue of the optimal size of a currency area both in a two and in a three-region world. (C) 1998 Elsevier Science B.V.