International monetary policy coordination in a new Keynesian model with NICE features
Poutineau, Jean-Christophe; Vermandel, Gauthier (2018), International monetary policy coordination in a new Keynesian model with NICE features, Journal of Economic Education, p. 1-16. 10.1080/00220485.2018.1438945
TypeArticle accepté pour publication ou publié
Journal nameJournal of Economic Education
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Centre de recherche en économie et management [CREM]
Laboratoire d'Economie de Dauphine [LEDa]
Abstract (EN)This paper provides a static two country new Keynesian model to teach two related questions in international macroeconomics: the international transmission of unilateral monetary policy decisions and the gains coming from the coordination monetary rules. We concentrate on “normal times” and use a thoroughly graphical approach to analyze the questions at hands. In this setting monetary policy is conducted using interest rates rules and economic integration between nations does not necessarily create the case for the coordination of monetary policy. In particular, we show that the conduct of optimal national monetary policies does not make any difference with the coordination of national policies, as this creates a situation where the international monetary system operates “Near an International Cooperative Equilibrium”.
Subjects / Keywordsmonetary policy; New Keynesian macroeconomics; international macroeconomics; economic policy; optimal interest rate rules; A20; E10; E50; F41
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