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.
File(s): File format is application/pdf http://www.dallasfed.org/assets/documents/institute/wpapers/2012/0104.pdf
Provider: Federal Reserve Bank of Dallas
Part of Series: Globalization Institute Working Papers
Publication Date: 2012