International Transmission of Monetary Policy Shocks: Can Asymmetric Price Setting Explain the Stylized Facts?
نویسنده
چکیده
How does an unexpected domestic monetary expansion a¤ect the foreign economy: Does it induce an increase or a decline in foreign production? And is it ’beggar-thy-neighbour’, or does it raise foreign welfare? Empirical evidence from VARs indicates that monetary policy has positive international transmission e¤ects on both foreign output and aggregate demand. A two-country dynamic general equilibrium model with sticky prices can account for this ‘stylized fact’ if we allow for asymmetric price setting inasmuch as domestic ...rms set export prices in their own currency (producer-currency pricing), whereas foreign ...rms price their exports in the importer’s currency (local-currency pricing).
منابع مشابه
International Transmission Effects of Monetary Policy Shocks: Can Asymmetric Price Setting Explain the Stylized Facts?
How does an unexpected domestic monetary expansion affect the foreign economy? Does it induce an increase or a decline in foreign production? In the traditional two-country Mundell-Fleming model, monetary policy has «beggar-thy-neighbor» effects. Yet, empirical evidence from VARs indicates that U.S. monetary policy has positive international transmission effects on both foreign (non-U.S. G-7) o...
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