RT Generic
T1 Inflation in open economies with complete markets
A1 Celentani, Marco
A1 Conde-Ruiz, J. Ignacio
A1 Desmet, Klaus
A2 FEDEA, 
AB 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.
YR 2004
FD 2004-06
LK https://hdl.handle.net/10016/4811
UL https://hdl.handle.net/10016/4811
LA eng
DS e-Archivo
RD 19 may. 2024