International Transmission and Monetary Policy Cooperation

Coenen, Günther; Lombardo, Giovanni; Smets, Frank; Straub, Roland

doi:10.7208/chicago/9780226278872.003.0004

Cited by 54 publications

(80 citation statements)

References 32 publications

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“…Similar values can be found in the literature assessing sub-optimal policies in DSGE models (e.g. Coenen et al, 2009). 15 Figure 7 shows a bubble-plot of the welfare losses in relation to the share of consumption demand for non-tradable goods and the parameter γ cn , the households' bias for nontradable consumption.…”

Section: Welfare Results In Representative Economiessupporting

confidence: 74%

“…As in Coenen et al, 2009, in order to compute the Ramsey policy we use a combination or our own MATLAB code and DYNARE (Juillard, 1996). 9 If we assume full pass-through for imported goods prices, completely stabilizing πN would replicate the flexibleprice allocation, and eliminate the inefficiency arising from volatile markups and price dispersion across varieties of non-traded goods.…”

Section: An Economy With Labor As the Only Input And Full Pass-throughmentioning

confidence: 99%

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Openness and optimal monetary policy

Lombardo

Ravenna

2014

Journal of International Economics

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Section: Welfare Results In Representative Economiessupporting

confidence: 74%

Section: An Economy With Labor As the Only Input And Full Pass-throughmentioning

confidence: 99%

Openness and optimal monetary policy

Lombardo

Ravenna

2014

Journal of International Economics

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“…η = 2.5), striking a balance between micro data evidence and macro aspects, in line with the DSGE literature concerned with the euro area (e.g. Smets and Wouters (2003), Altissimo et al (2011), Coenen et al (2010, Christiano et al (2005)). The discount factor equals β = 0.99, implying an annual interest rate of around four percent.…”

Section: Rs Taking As Given Constant Values Of the Fiscal Variablessupporting

confidence: 52%

“…In particular, our model does not allow for public transfers and investment, implying that the residually determined share of government expenditures is too high compared with the data. Moreover, the labour tax rate is too low if one looks at the combined numbers for labour taxes and social contribution rates (as reported, for example, in Coenen et al (2010)). For numerical choices similar to ours in small scale DSGE models, see Ferrero (2009) andCanzoneri et al (2004).…”

Section: Rs Taking As Given Constant Values Of the Fiscal Variablesmentioning

confidence: 99%

On the (In)Effectiveness of Fiscal Devaluations in a Monetary Union

Thadden

Lipińska

2012

SSRN Journal

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This paper explores the fiscal devaluation hypothesis in a model of a monetary union characterised by national fiscal policies and supranational monetary policy. We show that a unilateral tax shift towards indirect taxes in one of the countries produces small but non-negligible long run effects on output and consumption within and between the two countries only when international financial markets are perfectly integrated. In contrast to the existing literature, we find that shortrun effects are not always amplified by nominal wage rigidities. We document also how short-run effects of the tax shift depend on the choice of the inflation index stabilized by the central bank and on whether the tax shift is anticipated.

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“…When computing Nash equilibria under commitment, we follow common practice and look for open-loop equilibria (see, for example, Coenen, Lombardo, Smets, and Straub (2008)). Each authority chooses its plan at the beginning of time, taking as given the equilibrium behavior of the other authority.…”

Section: Optimal Policymentioning

confidence: 99%

Coordinating Monetary and Macroprudential Policies

Paoli

Paustian

2013

SSRN Journal

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The financial crisis has prompted macroeconomists to think of new policy instruments that could help ensure financial stability. Policymakers are interested in understanding how these should be set in conjunction with monetary policy. We contribute to this debate by analyzing how monetary and macroprudential policy should be conducted to reduce the costs of macroeconomic fluctuations. We do so in a model in which such costs are driven by nominal rigidities and credit constraints. We find that, if faced with cost-push shocks, policy authorities should cooperate and commit to a given course of action. In a world in which monetary and macroprudential tools are set independently and under discretion, our findings suggest that assigning conservative mandates (á la Rogoff [1985]) and having one of the authorities act as a leader can mitigate coordination problems. At the same time, choosing monetary and macroprudential tools that work in a similar fashion can increase such problems.

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International Transmission and Monetary Policy Cooperation

Cited by 54 publications

References 32 publications

Openness and optimal monetary policy

Openness and optimal monetary policy

On the (In)Effectiveness of Fiscal Devaluations in a Monetary Union

Coordinating Monetary and Macroprudential Policies

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