Showing 91 - 100 of 1,114
We analyze the policy trade-offs generated by local currency price stability of imports in economies where upstream producers strategically interact with downstream firms selling the final goods to consumers. We study the effects of staggered price setting at the downstream level on the optimal...
Persistent link: https://www.econbiz.de/10005727896
A central puzzle in international finance is that real exchange rates are volatile and, in stark contradiction to e.cient risk-sharing, negatively correlated with relative consumptions across countries. This paper shows that a model with incomplete markets and a low price elasticity of tradables...
Persistent link: https://www.econbiz.de/10005744300
This paper develops a quantitative, dynamic, open-economy model which endogenously generates high exchange rate volatility, whereas a low degree of pass-through stems from both nominal rigidities (in the form of local currency pricing) and price discrimination. We model real exchange rate...
Persistent link: https://www.econbiz.de/10005712615
A central puzzle in international finance is that real exchange rates are volatile and, in stark contradiction to efficient risk-sharing, negatively correlated with cross-country consumption ratios. This paper shows that a standard international business cycle model with incomplete asset markets...
Persistent link: https://www.econbiz.de/10005712673
This paper shows that standard international business cycle models can be reconciled with the empirical evidence on the lack of consumption risk sharing. First, we show analytically that with incomplete asset markets productivity disturbances can have large uninsurable effects on wealth,...
Persistent link: https://www.econbiz.de/10005312804
Research in the international dimensions of optimal monetary policy has long been inspired by a set of fascinating questions, shaping the policy debate in at least two eras of progressive cross-border integration of goods, factors, and assets markets in the years after World War I and from...
Persistent link: https://www.econbiz.de/10008504595
This paper investigates the international dimension of productivity and demand shocks to US manufacturing. Identifying shocks with sign restrictions based on standard theory predictions we find that productivity gains in manufacturing - our measure of tradables - have substantial aggregate...
Persistent link: https://www.econbiz.de/10005124152
Two specifications of an open-economy model are shown to generate high exchange-rate volatility and low exchange-rate pass-through (ERPT). In the model, price discrimination causes ERPT to be incomplete in both the short and the long run. In the short run, a small amount of nominal rigidities is...
Persistent link: https://www.econbiz.de/10005180695
Should monetary policy be preoccupied with large current account imbalances and extremely volatile exchange rates? Using a standard open economy model of pricing-to-market with incomplete asset markets and nominal rigidities, we show that the answer is yes. In our framework, supply shocks...
Persistent link: https://www.econbiz.de/10010554325
This chapter studies optimal monetary stabilization policy in interdependent open economies, by proposing a unified analytical framework systematizing the existing literature. In the model, the combination of complete exchange-rate pass-through ('producer currency pricing') and frictionless...
Persistent link: https://www.econbiz.de/10009002675