International Policy Coordination and Simple Monetary Policy Rules

Artikel

This paper studies monetary policy in an optimizing two-country model. We suppose a two-step production process that is associated with vertical trade. Prices of final consumption goods are sticky and pass-through can be incomplete. Monetary authorities should respond to both home and foreign shocks in this set-up. Which simple, i.e. non-optimal, targeting rule best supports the welfare maximizing policy hinges critically on the degree of the cross-country interdependence in production and the relative importance of productivity and cost-push shocks. We argue that the relative volatility of productivity and cost-push shocks determines whether the monetary authority should follow a price targeting rule whereas the degree of vertical integration determines which simple price targeting rule (producer or consumer price index targeting) is best.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Journal: Swiss Journal of Economics and Statistics ; ISSN: 2235-6282 ; Volume: 146 ; Year: 2010 ; Issue: 2 ; Pages: 451-479 ; Heidelberg: Springer

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Open Economy Macroeconomics ; International Policy Coordination and Transmission ; Monetary Policy ; Central Banks and Their Policies
• Thema: policy coordination ; policy rule ; consumer price targeting ; producer price targeting ; monetary targeting

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Berger, Wolfram
• Ereignis: Veröffentlichung
• (wer): Springer
• (wo): Heidelberg
• (wann): 2010

Weitere Informationen

• DOI: doi:10.1007/BF03399323
• Handle: http://hdl.handle.net/10419/185957
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ