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Exchange Rates, Local Currency Pricing and International Tax Policies

Chen, Sihao - 2018

Empirical evidence suggests that for many countries, retail prices of traded goods are sticky in national currencies. Movements in exchange rates then cause deviations from the law of one price, and exchange rate ëmisalignmentí, which cannot be corrected by monetary policy alone. This paper...

Persistent link: https://www.econbiz.de/10012480762

Sharing the Burden : Monetary and Fiscal Responses to a World Liquidity Trap

Cook, David - 2011

With integrated trade and financial markets, a collapse in aggregate demand in a large country can cause 'natural real interest rates' to fall below zero in all countries, giving rise to a global 'liquidity trap'. This paper explores the policy choices that maximize the joint welfare of all...

Persistent link: https://www.econbiz.de/10012461527

Monetary Policy in the Open Economy Revisited : Price Setting and Exchange Rate Flexibility

Devereux, Michael B. - 2000

This paper develops a welfare-based model of monetary policy in an open economy. We focus on the extent to which monetary policy should be employed in maintaining the exchange rate. The traditional approach maintains that exchange rate flexibility is desirable in the presence of real...

Persistent link: https://www.econbiz.de/10012471102

Consumption Heterogeneity and Monetary Policy in an Open Economy

Chen, Sihao; Devereux, Michael B.; Shi, Kang; Xu, Jenny - National Bureau of Economic Research - 2022

We explore how consumption heterogeneity affects the international transmission mechanism of monetary shocks and the … presence of consumption heterogeneity and currency misalignment implies that CPI inflation targeting is no longer optimal in … currency misalignment and consumption heterogeneity can be eliminated, and even under LCP, PPI targeting is the optimal …

Persistent link: https://www.econbiz.de/10013172135

Commodity Currencies and Monetary Policy

Devereux, Michael B. - 2018

Countries that specialize in commodity exports often exhibit a correlation between the relevant commodity price and the value of their currency. We explore a natural but little-studied explanation for this correlation. An increase in the commodity price leads to increases in the future values of...

Persistent link: https://www.econbiz.de/10012480727

Special issue: 39th annual NBER international seminar on macroeconomics

Devereux, Michael B. (ed.) - Annual NBER International Seminar on Macroeconomics …; … - 2017

Persistent link: https://www.econbiz.de/10011915805

A New Dilemma : Capital Controls and Monetary Policy in Sudden Stop Economies

Devereux, Michael B. - 2015

The dangers of high capital flow volatility and sudden stops have led economists to promote the use of capital controls as an addition to monetary policy in emerging market economies. This paper studies the benefits of capital controls and monetary policy in an open economy with financial...

Persistent link: https://www.econbiz.de/10012456880

Self-Oriented Monetary Policy, Global Financial Markets and Excess Volatility of International Capital Flows

Banerjee, Ryan - 2015

This paper explores the nature of macroeconomic spillovers from advanced economies to emerging market economies (EMEs) and the consequences for independent use of monetary policy in EMEs. We first empirically document the effects of US monetary policy shocks on a sample group of EMEs. A...

Persistent link: https://www.econbiz.de/10012456933

Globalisation, Pass-through and the Optimal Policy Response to Exchange Rates

Devereux, Michael B. - 2014

In this paper we examine how monetary policy should respond to nominal exchange rates in a New Keynesian open economy model that allows for a non-trivial role for sterilised intervention. The paper develops the argument against the backdrop of the evolving policy-making environment of Asian...

Persistent link: https://www.econbiz.de/10012458414

Capital Controls, Global Liquidity Traps and the International Policy Trilemma

Devereux, Michael B. - 2013

The 'International Policy Trilemma' refers to the constraint on independent monetary policy that is forced on a country which remains open to international financial markets and simultaneously pursues an exchange rate target. This paper shows that, in a global economy with open financial...

Persistent link: https://www.econbiz.de/10012459570