Showing 1 - 9 of 9
We develop an analytically tractable two-country model that marries a full account of global macroeconomic dynamics to a supply framework based on monopolistic competition and sticky nominal prices. The model offers simple and intuitive predictions about exchange rates and current accounts that...
Persistent link: https://www.econbiz.de/10005292397
The central claim in this paper is that by explicitly introducing costs of international trade (narrowly, transport costs but more broadly, tariffs, nontariff barriers and other trade costs), one can go far toward explaining a great number of the main empirical puzzles that international...
Persistent link: https://www.econbiz.de/10005292400
Abstract : It is well known that if international linkages are relatively small, the potential gains to international monetary policy coordination are typically quite limited. But what if goods and financial markets are tightly linked? Is it then problematic if countries unilaterally design...
Persistent link: https://www.econbiz.de/10005649533
Persistent link: https://www.econbiz.de/10005512052
How will countries handle idiosyncratic national macroeconomic shocks under the European single currency? The ways in which European countries now react to internally asymmetric shocks provide a better forecast than do the regional response patterns of the United States. In this paper we compare...
Persistent link: https://www.econbiz.de/10005512065
We propose that analysis of purchasing power parity (PPP) and the law of one price (LOOP) should explicitly take into account the possibility of "commodity points" -- thresholds delineating a region of no central tendency among relative prices, possib ly due to lack of perfect arbitrage in the...
Persistent link: https://www.econbiz.de/10005476208
The paper develops a simple stochastic new open economy macroeconomic model based on sticky nominal wages. Explicit solution of the wage-setting problem under uncertainty allows one to analyze the effects of the monetary regime on welfare, expected output, and the expected terms of trade....
Persistent link: https://www.econbiz.de/10005476211
Abstract : The US current account deficit has been persistently large and has brought the country's ratio of foreign debt to GDP to 20%, a figure that is high by historical standards. This paper argues that while US solvency is not a near-term constraint on ongoing deficits, the sheer size of...
Persistent link: https://www.econbiz.de/10005476231
Persistent link: https://www.econbiz.de/10005476236