International monetary policy coordination and financial market integration

Arbeitspapier

The welfare gains from international co-ordination of monetary policy are analysed in a two-country model with sticky prices. The gains from co-ordination are compared under two alternative structures for financial markets: financial autarky and risk sharing. The welfare gains from co-ordination are found to be largest when there is risk sharing and the elasticity of substitution between home and foreign goods is greater than unity. When there is no risk sharing the gains to co-ordination are almost zero. It is also shown that the welfare gain from risk sharing can be negative when monetary policy is uncoordinated.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Working Paper ; No. 174

Classification and Topics

• Classification: Wirtschaft ; Monetary Policy ; Central Banks and Their Policies ; International Policy Coordination and Transmission

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Sutherland, Alan
• Event: Veröffentlichung
• (who): European Central Bank (ECB)
• (where): Frankfurt a. M.
• (when): 2002

Further information

• Handle: http://hdl.handle.net/10419/152608
• Last update: 10.03.2025, 11:45 AM CET