AURAY, Stéphane; EYQUEM, Aurélien - In: Annales d'Economie et de Statistique (2013) 109-110
The paper builds a two-country model of a monetary union with home bias and price stickiness. Incompleteness of financial asset markets is allowed. In this environment, we derive the solution for optimal behavior by the monetary policymaker and show that welfare can be higher under incomplete...