We use a standard new Keynesian model to evaluate the cost of disinflation - measured by the sacrifice ratio, the central bank's loss function, and the welfare cost - in a small open economy vis-à-vis a closed economy. Disinflation is either more costly or less beneficial in the small open...

We study the design of optimal monetary policy (Ramsey policies) in a model with sticky prices and unionized labour markets. Collective wage bargaining and unions monopoly power tend to dampen wage fluctuations and to amplify employment fluctuations relatively to a DNK model with walrasian...