GIORGIO, GIORGIO DI; NISTICO, SALVATORE - In: Journal of Money, Credit and Banking 39 (2007) 8, pp. 1947-1985
This paper studies monetary policy in a two-country model where agents can invest their wealth in both stock and bond … trade stocks of listed foreign firms. We show that, in order to achieve price stability, the Central Banks in both countries … rational expectations equilibria and approximation of the "Wicksellian" interest rate policy by simple monetary policy rules …