Arbeitspapier

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

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.

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

Bibliographic citation
Series: Diskussionsbeiträge ; No. 2010/6

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

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

Handle
Last update
10.03.2025, 11:44 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Tervala, Juha
  • Engler, Philipp
  • Freie Universität Berlin, Fachbereich Wirtschaftswissenschaft

Time of origin

  • 2010

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