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Exchange rates and monetary policy in emerging market economies

Devereux, Michael B.; Lane, Philip R. - 2001

Persistent link: https://www.econbiz.de/10001592747

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

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

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 choice of optimal monetary policy in an open economy. Incorporating two types of agents (Ricardian versus Keynesian) into a standard open economy macro model, we find that there...

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

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

Trade Wars and the Optimal Design of Monetary Rules

Auray, Stéphane; Devereux, Michael B.; Eyquem, Aurélien - National Bureau of Economic Research - 2024

Monetary rules may have a large effect on the outcome of trade wars if central banks target the CPI inflation rate or more generally changes in the relative price of traded goods. We lay out a two-country open-economy model with sticky prices where countries engage in trade wars. In the presence...

Persistent link: https://www.econbiz.de/10014544729

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

Cook, David - 2011

choices that maximize the joint welfare of all countries following such a shock, when governments cooperate on both fiscal and … monetary policy. Adjusting to a large negative demand shock requires raising world aggregate demand, as well as redirecting … respond perversely. A negative shock causes an appreciation of the home terms of trade, exacerbating the slump in the home …

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