This paper evaluates simple, non-optimising monetary policy rules in the tradition of the well-known Poole analysis within a general two-country open-economy model of the New Open Economy Macroeconomic framework. Pure money supply rules are compared with simple interest rate rules for the large...

This paper evaluates simple, non-optimising monetary policy rules in the tradition of the well-known Poole analysis within a general two-country open-economy model of the New Open Economy Macroeconomic framework. Pure money supply rules are compared with simple interest rate rules for the large...

This paper evaluates simple, non-optimising monetary policy rules in the tradition of the well-known Poole analysis within a general two-country open-economy model of the New Open Economy Macroeconomic framework. Pure money supply rules are compared with simple interest rate rules for the large...

We assess to what extent wage inflation policies in Germany could contribute to an economic rebalancing in the euro area and the rest of the world. We find that a rise in nominal wage inflation has positive short-run effects on inflation and output in Germany and the rest of the euro area. The...

Empirical evidence suggests that a monetary shock induces the exchange rate to overshoot its long-run level. The estimated magnitude and timing of the overshooting, however, varies across studies. This paper generates delayed overshooting in a new Keynesian model of a small open economy by...

How does international financial integration affect national price levels? To analyze this question, this paper formulates a two-country open economy sticky-price model under either segmented or complete asset markets. It is shown that the effect of financial integration, i.e. moving from...

In this paper Friedmann (1953) and Mundell´s (1968) position favouring flexible over alternative exchange rate regimes is reassessed in the context of international financial market integration. In a new open economy macroeconomic framework the paper shows that financial market integration...

We discuss how the welfare ranking of fixed and flexible exchange rate regimes in a New Open Economy Macroeconomics model depends on the interplay between the degree of exchange rate pass-through and the elasticity of substitution between home and foreign goods. We identify combinations of these...

We argue that a higher share of the private sector in a country's external debt raises the incentive to stabilize the exchange rate. We present a simple model in which exchange rate volatility does not affect agents' welfare if all the debt is incurred by the government. Once we introduce...