Working Paper
Optimal monetary policy in a two country model with firm-level heterogeneity
Abstract: This paper studies non-cooperative monetary policy in a two country general equilibrium model where international economic integration is endogenised through firm-level heterogeneity and monopolistic competition. Economic integration between countries is a source of policy competition, generating higher long-run inflation, and increased gains from monetary cooperation.
Keywords: Price levels; Macroeconomics - Econometric models;
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Provider: Federal Reserve Bank of Dallas
Part of Series: Globalization Institute Working Papers
Publication Date: 2012
Number: 104