The 'New Keynesian' Phillips Curve: Closed Economy versus Open Economy

The Paper extends Woodford’s (2000) analysis of the closed economy Phillips curve to an open economy with both commodity trade and capital mobility. We show that consumption smoothing, which comes with the opening of the capital market, raises the degree of strategic complementarity among monopolistic competitive suppliers, thus rendering prices more sticky and magnifying output responses to nominal GDP shocks.

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Year of publication:	2001-11
Authors:	Razin, Assaf ; Yuen, Chi-Wa
Institutions:	C.E.P.R. Discussion Papers
Subject:	capital mobility \| new keynesian \| Phillips curve \| trade

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Extent:	application/pdf
Series:	CEPR Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 3083
Classification:	E12 - Keynes; Keynesian; Post-Keynesian ; F41 - Open Economy Macroeconomics
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005497815