Smets, Frank; Wouters, Raf - Nationale Bank van Belgiƫ/Banque national de Belqique (BNB) - 2002
This paper analyses the implications of imperfect exchange rate passthrough for optimal monetary policy in a linearised open-economy dynamic general equilibrium model calibrated to euro area data. Imperfect exchange rate pass through is modelled by assuming sticky import price behaviour. The...