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Labour market reform and the sustainability of exchange rate pegs

Castrén, Olli; Takalo, Tuomas; Wood, Geoffrey - 2004

adjustments. We formalise this notion by incorporating labour market rigidities into an “escape clause” model of currency crises …. We show that the absence of structural reform makes a currency peg more fragile and undermines the credibility of the … average inflation rate when the currency peg is more vulnerable to “busts” than “booms”. This interaction between …

Persistent link: https://www.econbiz.de/10009639466

Should larger reserve holdings be more diversified?

Beck, Roland; Weber, Sebastian - 2010

diversification is optimal or not. We estimate for a panel of 20 countries the determinants of the currency composition of reserves …

Persistent link: https://www.econbiz.de/10009640347

The admission of accession countries to an enlarged monetary union

Ca' Zorzi, Michele; De Santis, Roberto A. - 2003

The enlargement of the European monetary union to include the accession countries (ACs) will not lead to higher average inflation in the enlarged euro area, but only to inflation redistribution across countries if continuity of the monetary policy framework is preserved. In the short term,...

Persistent link: https://www.econbiz.de/10009639851

Definition of price stability, range and point inflation targets

Castelnuovo, Efrem; Nicoletti-Altimari, Sergio; … - 2003

Announcing a quantitative objective for price developments has become a common practice in modern monetary policy making. While the specific features of such announced objectives vary across countries, a common rationale for this is to help anchoring inflation expectations. We use survey data on...

Persistent link: https://www.econbiz.de/10009635904

The operational target of monetary policy and the rise and fall of reserve position doctrine

Bindseil, Ulrich - 2004

Before 1914, there was little doubt that central bank policy meant first of all control of short term interest rates. This changed dramatically in the early 1920s with the birth of “reserve position doctrine” (RPD) in the US, according to which a central bank should, via open market...

Persistent link: https://www.econbiz.de/10009639426

Time variation in U.S. wage dynamics

Hofmann, Boris; Peersman, Gert; Straub, Roland - 2010

This paper explores time variation in the dynamic effects of technology shocks on U.S. output, prices, interest rates as well as real and nominal wages. The results indicate considerable time variation in U.S. wage dynamics that can be linked to the monetary policy regime. Before and after the...

Persistent link: https://www.econbiz.de/10009640310

Ramsey monetary policy and international relative prices

Faia, Ester; Monacelli, Tommaso - 2004

We analyze welfare maximizing monetary policy in a dynamic two-country model with price stickiness and imperfect competition. In this context, a typical terms of trade externality affects policy interaction between independent monetary authorities. Unlike the existing literature, we remain...

Persistent link: https://www.econbiz.de/10009639398

Monetary policy in a low pass-through environment

Monacelli, Tommaso - 2003

We study the effects on the optimal monetary policy design problem of allowing for deviations from the law of one price in import goods prices. We reach three basic results. First, incomplete pass-through renders the analysis of monetary policy of an open economy fundamentally different from the...

Persistent link: https://www.econbiz.de/10009639840

Anticipated Ramsey reforms and the uniform taxation principle

Schmitt-Grohé, Stephanie; Uribe, Martín - 2003

This paper studies the role of asset-market completeness for the properties of optimal fiscal and monetary policy. A suitable framework for this purpose is the small open economy with complete international asset markets. For in this environment changes in policy represent country-specific risk...

Persistent link: https://www.econbiz.de/10009639857

Openness and optimal monetary policy

Lombardo, Giovanni; Ravenna, Federico - 2010

We show that the composition of imports has important implications for the optimal volatility of the exchange rate. Using input-output data for 25 countries we document substantial differences in the import and non-tradable content of final demand components, and in the role played by imported...

Persistent link: https://www.econbiz.de/10009640512

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