Monetary Policy in Emu With Asymmetric Transmission and Non‐tradable Goods

Gros, Daniël; Hefeker, Carsten

doi:10.1111/j.1467-9485.2007.00414.x

Cited by 4 publications

(5 citation statements)

References 35 publications

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“…Two models are estimated for Equation (2) Short-term adjustment may be asymmetric in international inflation transmission (see e.g. Hooker, 2002;Gros and Hefeker, 2007). The adjustment speed at the time when inflation in one economy is above the equilibrium level of its relationship with inflation in another economy may be different from the adjustment speed when it is below the equilibrium.…”

Section: Methodsmentioning

confidence: 99%

Inflation Transmission in Greater China

Liu

Margaritis

Zhang

2015

China and World Economy

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This paper examines inflation dynamics in Greater China. Using an asymmetric error correction model, we investigate how inflation in Hong Kong and Macao are related to inflation in Chinese Mainland. Our results based on data from July 1997 to December 2012 reveal that a long‐term equilibrium relation exists between inflation in Chinese Mainland and inflation in both Hong Kong and Macao, the two Special Administrative Regions of China. The degree of inflation pass‐through is higher for Macao than for Hong Kong. Moreover, we find no evidence of asymmetries in either Hong Kong and Macao's adjustment speeds towards long‐run equilibrium or in the short‐run pass‐through of accelerating or decelerating inflation in the Mainland. Collectively, our results show a close relationship among price dynamics of the three economies and call for a reconsideration of the exchange rate anchor in the Greater China Region.

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Section: Methodsmentioning

confidence: 99%

Inflation Transmission in Greater China

Liu

Margaritis

Zhang

2015

China and World Economy

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“…Comparison of (19)(20)(21) and (27)(28)(29) reveals that member countries are better off under the rule of a federalist hegemon than under a nationalist's. They are affected in the same way by common shocks and their own idiosyncratic shocks, but they do not have to cope with the hegemon's reaction to her own idiosyncratic shocks.…”

Section: A Federalist Hegemonmentioning

confidence: 99%

“…20 They show that the ranking of decision mechanisms in terms of expected losses differs across countries: those that play the role of a hegemon or head the committee minimize their losses. This result is fairly intuitive since those mechanisms allow the hegemon or the chairman to steer the common monetary policy toward their needs.…”

Section: Outcomes With Chairmenmentioning

confidence: 99%

“…Gerlach-Kristen (2006) also underlines that committees are an efficient way to deal with monetary uncertainty about the economy, while Waller (2002) stresses that monetary policy committees are a way to cope with political uncertainty. Hefeker (2003), Matsen and Røisland (2005) and Gros and Hefeker (2007) investigate the welfare consequences of decision rules in a monetary union. A reference that explicitly relates the reactivity of central banks to the existence of monetary policy committees is GerlachKristen (2005).…”

Section: Introductionmentioning

confidence: 99%

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How monetary policy committees impact the volatility of policy rates

Farvaque

Matsueda

Méon³

2009

Journal of Macroeconomics

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This paper relates the volatility of interest rates to the collective nature of monetary policymaking in monetary unions. Several decision rules are modelled, including hegemonic and democratic procedures, and also committees headed by a chairman. A ranking of decision rules in terms of the volatility of policy rates is obtained, showing that the presence of a chairman has a cooling effect. However, members of a monetary union are better off under symmetric rules (voting, averaging, bargaining), unless they themselves chair the union. The results are robust to the inclusion of heterogeneities among members of the monetary union. How monetary policy committees impact the volatility of policy ratesEtienne Farvaque * Norimichi Matsueda † Pierre-Guillaume Méon ‡ § Abstract This paper relates the volatility of interest rates to the collective nature of monetary policymaking in monetary unions. Several decision rules are modelled, including hegemonic and democratic procedures, and also committees headed by a chairman. A ranking of decision rules in terms of the volatility of policy rates is obtained, showing that the presence of a chairman has a cooling effect. However, members of a monetary union are better off under symmetric rules (voting, averaging, bargaining), unless they themselves chair the union. The results are robust to the inclusion of heterogeneities among members of the monetary union.

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“…Phase similarity determines whether the direction of a shift in the common monetary policy stance matches the cyclical needs of each country. Yet similar amplitudes of business cycles do not guarantee that the magnitude of the change in the policy stance matches the needs of each country, as it is likely that the monetary transmission is different and unstable across countries in different stages of integration (see Gros and Hefeker, 2007).…”

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confidence: 99%

Cape Verde: The Case for Euroisation

Loureiro

Martins²,

Ribeiro³

2010

South African Journal of Economics

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After a decade of a successful peg to the euro, the authorities of Cape Verde are considering the official euroisation of the country. For an "ex ante" economic evaluation of such a move, this paper assesses whether Cape Verde fulfills key economic criteria devised by the optimum currency areas literature, using as benchmark the comparable records of the 27 European Union (EU) countries. The answer is positive. Overall, we find that Cape Verde is not less suited for euroisation than some of the current euro area members and most of the remaining members of the EU. Copyright (c) 2010 The Authors. Journal compilation (c) 2010 Economic Society of South Africa.

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Monetary Policy in Emu With Asymmetric Transmission and Non‐tradable Goods

Cited by 4 publications

References 35 publications

Inflation Transmission in Greater China

Inflation Transmission in Greater China

How monetary policy committees impact the volatility of policy rates

Cape Verde: The Case for Euroisation

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