Openness and optimal monetary policy

Abstract

4Non-technical summary 5

The Globalisation of Inflation: the Growing Importance of Global Value Chains

“…For example, for a given level of exports and imports, greater global competition at each stage of production would result in more substitutability of factor inputs and outputs and hence raise the influence of global slack conditions at the expense of domestic ones. In this sense, trends in intermediate trade may be more informative about trends in global competition than the conventional measure based on the sum of all exports and imports (Lombardo and Ravenna (2014) and Burstein et al (2008)). 8…”

Monnaie unique et intégration par le marché en Afrique: le cas de la CEEAC et de la CEDEAO

“…En estimant les déterminants des exportations bilatérales, ils montrent que l'effet positif et significatif de l'intégration monétaire sur le commerce bilatéral est affaibli par la complexité des régimes politiques. D'autres études ont privilégié l'effet de politiques monétaires optimales sur le commerce (Lombardo et Ravenna, ; Cooke, ; Gong et al ., ).…”

International Trade Openness and Monetary Policy: Evidence from Cross-Country Data

“…On the one hand, Clarida, Galí, and Gertler (2002) and Corsetti, Dedola, and Leduc (2010) show that in a specific class of economic models the design of monetary policy in open economies is "isomorphic" to the conduct of monetary policy in a closed economy: Central banks should only respond to changes in inflation and the output gap, but they may respond differently to these depending on the degree of trade openness. On the other hand, morerecent studies have shown that this need not necessarily be the case in more realistic environments (Faia and Monacelli, 2008, De Paoli, 2009, and Lombardo and Ravenna, 2014 in which central banks in open economies may also want to respond to changes in other variables such as the real exchange rate.…”