We establish the share of exports in production as a sufficient statistic for optimal non-cooperative monetary policy. Under financial autarky, markups positively co-move with the export share. For complete markets, markups should be procyclical if the export share is procyclical. When central...

The result is false positive when it shows something is present when it really is not. In this paper, we develop a test for detecting false positives in dynamic economic models. We then apply this test to the New Keynesian model and the structural vector autoregression model with short-run...