Cwik, Tobias; Müller, Gernot J.; Wolters, Maik H. - In: Journal of Economic Dynamics and Control 35 (2011) 4, pp. 545-564
This paper explores the role of trade integration--or openness--for monetary policy transmission in a medium-scale new Keynesian model. Allowing for strategic complementarities in price setting, we highlight a new dimension of the exchange rate channel by which monetary policy directly impacts...