Beggar-thyself or beggar-thy-neighbour? The welfare effects of monetary policy

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This paper examines whether monetary expansion is a beggar-thyself or beggar-thy-neighbour policy. Obstfeld and Rogoff (1995) show that monetary expansion under producer currency pricing increases domestic and foreign overall welfare, in cases where the crosscountry substitutability is high. If the cross-country substitutability is low, then monetary expansion is a beggar-thyself policy that reduces domestic welfare and increases foreign welfare (Corsetti & Pesenti 2001; Tille 2001). In this paper, we will show that regardless of whether the cross-country substitutability is high or low, monetary expansion is always a beggar-thyself policy in the short run.

Object Details

• ISBN: 978-3-941240-18-6
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Diskussionsbeiträge ; No. 2010/6

Classification and Topics

• Classification: Wirtschaft ; Business Fluctuations; Cycles ; Monetary Policy ; International Finance: General ; Open Economy Macroeconomics
• Subject: Open economy macroeconomics ; monetary policy ; beggar-thyself ; beggar-thy-neighbour ; Geldpolitik ; Konjunkturzusammenhang ; Offene Volkswirtschaft ; Wohlfahrtseffekt ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Tervala, Juha ; Engler, Philipp
• Event: Veröffentlichung
• (who): Freie Universität Berlin, Fachbereich Wirtschaftswissenschaft
• (where): Berlin
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/36679
• Last update: 10.03.2025, 11:44 AM CET