Chen, Sihao; Devereux, Michael B.; Shi, Kang; Xu, Jenny - National Bureau of Economic Research - 2022
choice of optimal monetary policy in an open economy. Incorporating two types of agents (Ricardian versus Keynesian) into a … standard open economy macro model, we find that there are sizeable ranges of household heterogeneity in which monetary policy … the optimal monetary policy under PCP and can restore the economy to the efficient equilibrium. Under LCP, however, the …