Inflation in open economies with complete markets

Celentani, Marco; Conde-Ruiz, J. Ignacio; Desmet, Klaus

Publication:
Inflation in open economies with complete markets

dc.affiliation.dpto	UC3M. Departamento de Economía	es
dc.contributor.author	Celentani, Marco
dc.contributor.author	Conde-Ruiz, J. Ignacio
dc.contributor.author	Desmet, Klaus
dc.contributor.other	FEDEA
dc.date.accessioned	2009-07-16T06:46:23Z
dc.date.available	2009-07-16T06:46:23Z
dc.date.issued	2004-06
dc.description.abstract	This paper uses an overlapping generations model to analyze monetary policy in a two-country model with asymetric shocks. Agents insure against risk through the exchange of a complete set of real securities. Each central bank is able to commit to the contingent monetary policy rule that maximizes domestic welfare. In an attempt to improve their country's terms of trade of securities, central banks may choose to commit to costly inflation in favorable states of nature. In equilibrium the effects on the terms of trade wash out, leaving both countries worse off. Countries facing asymmetric shocks may therefore gain from monetary cooperation.
dc.format.mimetype	application/pdf
dc.identifier.uri	https://hdl.handle.net/10016/4811
dc.language.iso	eng
dc.relation.hasversion	http://hdl.handle.net/10016/4799
dc.relation.ispartofseries	Documento de trabajo
dc.relation.ispartofseries	2004-12
dc.relation.publisherversion	http://www.fedea.es/pub/papers/2004/dt2004-12.pdf
dc.rights	Atribución-NoComercial-SinDerivadas 3.0 España
dc.rights.accessRights	open access
dc.rights.uri	http://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.subject.eciencia	Economía
dc.subject.other	Inflation
dc.subject.other	Risk sharing
dc.subject.other	Security markets
dc.subject.other	Terms of trade
dc.subject.other	Monetary cooperation
dc.subject.other	Currency union
dc.title	Inflation in open economies with complete markets
dc.type	working paper	*
dspace.entity.type	Publication