Arbeitspapier
How valuable is exchange rate flexibility? Optimal monetary policy under sectoral shocks
The paper explores the optimal monetary policy reaction to productivity shocks in an open economy. Whereas earlier studies assume that countries specialize in producing particular goods, I enrich the analysis by allowing for incomplete specialization. I confirm the finding of Obstfeld and Rogoff (2000)—who build on Friedman (1953)—that a flexible exchange rate is highly valuable in delivering the optimal response to country- specific shocks. Its value is, however, much smaller when shocks are sector-specific, because exchange rate fluctuations then lead to misallocations between different firms within a sector. The limitation on the value of flexibility is sizable even when specialization is high.
- Sprache
-
Englisch
- Erschienen in
-
Series: Staff Report ; No. 147
- Klassifikation
-
Wirtschaft
Foreign Exchange
Open Economy Macroeconomics
International Policy Coordination and Transmission
- Thema
-
optimal monetary policy, exchange rate flexibility, competitiveness
Geldpolitik
Schock
Produktivität
Internationale Arbeitsteilung
Außenhandelsstruktur
Flexibler Wechselkurs
Wohlfahrtsanalyse
Theorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Tille, Cédric
- Ereignis
-
Veröffentlichung
- (wer)
-
Federal Reserve Bank of New York
- (wo)
-
New York, NY
- (wann)
-
2002
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:41 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Tille, Cédric
- Federal Reserve Bank of New York
Entstanden
- 2002
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