This paper studies the optimal design of monetary policy in an optimizing two-country sticky price model. We suppose that the production sequence of final consumption goods stretches across both contries and is associated with vertical trade. Prices of final consumption goods are sticky in the...

We analyze the effects of offshoring in a multisector-growth-model where the sectors differ by TFP-growth. Our results imply that offshoring influences the long run grwoth rate of the economy along different channels and that the grwoth effects depend on the development of terms of trade and on...