Publizierte Beiträge 2010
Beitrag 2010-II-2
"International Policy Coordination and Simple Monetary Policy Rules"
Wolfram Berger
Zusammenfassung:This paper studies monetary policy in an optimizing two-country model. We suppose a two-step production process that is associated with vertical trade. Prices of final consumption goods are sticky and pass-through can be incomplete. Monetary authorities should respond to both home and foreign shocks in this set-up. Which simple, i.e. non-optimal, targeting rule best supports the welfare maximizing policy hinges critically on the degree of the cross-country interdependence in production and the relative importance of productivity and cost-push shocks. We argue that the relative volatility of productivity and cost-push shocks determines whether the monetary authority should follow a price targeting rule whereas the degree of vertical integration determines which simple price targeting rule (producer or consumer price index targeting) is best.
Seiten: 451-479
JEL Klassifikation: F41, F42, E52, E58
Schlüsselwörter: policy coordination, policy rule, consumer price targeting, producer price targeting, monetary targeting
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