Optimal monetary policy with endogenous export participation (working paper)
Cooke, Dudley
Date: 2012
Working Paper
Publisher
University of Exeter Business School
Abstract
This paper studies two often cited benefits of international monetary cooperation
- lower inflation and increased international trade. I embed a model of endogenous export
participation due to per period export costs within a standard monetary model of the business
cycle. Endogenous export participation has two implications: policy ...
This paper studies two often cited benefits of international monetary cooperation
- lower inflation and increased international trade. I embed a model of endogenous export
participation due to per period export costs within a standard monetary model of the business
cycle. Endogenous export participation has two implications: policy competition between
countries is more aggressive and the welfare gain from cooperation is magnified. Because
high inflation also acts to raise firm export costs monetary cooperation offers an alternative
explanation for rising numbers of exported products.
Economics
Faculty of Environment, Science and Economy
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