Openness, imperfect exchange rate pass-through and monetary policy

Arbeitspapier

This paper analyses the implications of imperfect exchange rate passthrough for optimal monetary policy in a linearised open-economy dynamic general equilibrium model calibrated to euro area data. Imperfect exchange rate pass through is modelled by assuming sticky import price behaviour. The degree of domestic and import price stickiness is estimated by reproducing the empirical identified impulse response of a monetary policy and exchange rate shock conditional on the response of output, net trade and the exchange rate. It is shown that a central bank that wants to minimise the resource costs of staggered price setting will aim at minimising a weighted average of domestic and import price inflation.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: NBB Working Paper ; No. 19

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Central Banks and Their Policies ; Open Economy Macroeconomics
• Thema: monetary policy ; open economies ; exchange rate pass-through ; Geldpolitik ; Zentralbank ; Offene Volkswirtschaft ; Wechselkurspolitik ; Exchange Rate Pass-Through ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Smets, Frank ; Wouters, Raf
• Ereignis: Veröffentlichung
• (wer): National Bank of Belgium
• (wo): Brussels
• (wann): 2002

Weitere Informationen

• Handle: http://hdl.handle.net/10419/144233
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ