International Transmission of Monetary Shocks and the Non‐neutrality of International Money
AbstractThis paper investigates how monetary shocks are transmitted internationally. It shows that where a national currency is used as an international medium of exchange, the international money is non-neutral. In particular, an increase in the supply of international money leads to a transfer of real resources to the international money-issuing country from its trading partner. It also induces an expansion of the non-tradable sector in the international money-issuing country, and an expansion the tradable sector in its trading partner. The real impact of a monetary shock is greater under a fixed exchange rate system than under a flexible exchange rate system.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Review of International Economics.
Volume (Year): 20 (2012)
Issue (Month): 1 (02)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576
Other versions of this item:
- Wenli Cheng & Dingsheng Zhang, 2011. "International Transmission of Monetary Shocks and the Non-Neutrality of International Money," CEMA Working Papers, China Economics and Management Academy, Central University of Finance and Economics 434, China Economics and Management Academy, Central University of Finance and Economics.
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- F31 - International Economics - - International Finance - - - Foreign Exchange
- E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
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