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The simple geometry of transmission and stabilization in closed and open economies Author info | Abstract | Publisher info | Download info | Related research | Statistics Giancarlo Corsetti
Paolo Pesenti
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This paper provides an introduction to the recent literature on macroeconomic stabilization in closed and open economies. We present a stylized theoretical framework, and illustrate its main properties with the help of an intuitive graphical apparatus. Among the issues we discuss: optimal monetary policy and the welfare gains from macroeconomic stabilization; international transmission of real and monetary shocks and the role of exchange rate pass-through; the design of optimal exchange rate regimes and monetary coordination among interdependent economies.Classification-JEL: E31, E52, F42
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Paper provided by European University Institute in its series Economics Working Papers with number
ECO2005/26.
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Date of creation: 2005Date of revision:
Handle: RePEc:eui:euiwps:eco2005/26Contact details of provider: Postal: Badia Fiesolana, Via dei Roccettini, 9, 50016 San Domenico di Fiesole (FI) Italy Phone: +39-055-4685.982 Fax: +39-055-4685.902 Web page: http://www.eui.eu/ECO/ More information through EDIRC
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Keywords: optimal monetary policy nominal rigidities exchange rate pass-through international cooperation Other versions of this item:
Paper Giancarlo Corsetti & Paolo Pesenti, 2005.
"The simple geometry of transmission and stabilization in closed and open economies ,"
Staff Reports
209, Federal Reserve Bank of New York.
[Downloadable!] Giancarlo Corsetti & Paolo Pesenti, 2005.
"The Simple Geometry of Transmission and Stabilization in Closed and Open Economies ,"
NBER Working Papers
11341, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Corsetti, Giancarlo & Pesenti, Paolo, 2005.
"The Simple Geometry of Transmission and Stabilization in Closed and Open Economies ,"
CEPR Discussion Papers
5080, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) This paper has been announced in the following NEP Reports :
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.: Cedric Tille, 2002.
"How valuable is exchange rate flexibility? Optimal monetary policy under sectoral shocks ,"
Staff Reports
147, Federal Reserve Bank of New York.
[Downloadable!]
Lars E. O. Svensson, 2003.
"Escaping from a Liquidity Trap and Deflation: The Foolproof Way and Others ,"
Journal of Economic Perspectives ,
American Economic Association, vol. 17(4), pages 145-166, Fall.
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Other versions: Taylor, John B., 1993.
"Discretion versus policy rules in practice ,"
Carnegie-Rochester Conference Series on Public Policy ,
Elsevier, vol. 39, pages 195-214, December.
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Svensson, Lars E O, 1998.
"Open-Economy Inflation Targeting ,"
CEPR Discussion Papers
1989, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Other versions:
Lars E. O. Svensson, 2000.
"Open-Economy Inflation Targeting ,"
NBER Working Papers
6545, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Svensson, L.E.O., 1998.
"Open-Economy Inflation Targeting ,"
Papers
638, Stockholm - International Economic Studies.
Svensson, Lars E.O., 1998.
"Open-Economy Inflation Targeting ,"
Seminar Papers
638, Stockholm University, Institute for International Economic Studies.
[Downloadable!] Svensson, Lars E. O., 2000.
"Open-economy inflation targeting ,"
Journal of International Economics ,
Elsevier, vol. 50(1), pages 155-183, February.
[Downloadable!] (restricted) Alan Sutherland, 2002.
"Incomplete Pass-Through and the Welfare Effects of Exchange Rate Variability ,"
Discussion Paper Series, Department of Economics
0212, Department of Economics, University of St. Andrews.
[Downloadable!]
Other versions:
Sutherland, Alan, 2002.
"Incomplete Pass-Through and the Welfare Effects of Exchange Rate Variability ,"
CEPR Discussion Papers
3431, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Sutherland, Alan, 2005.
"Incomplete pass-through and the welfare effects of exchange rate variability ,"
Journal of International Economics ,
Elsevier, vol. 65(2), pages 375-399, March.
[Downloadable!] (restricted) Cedric Tille, 1999.
"The role of consumption substitutability in the international transmission of shocks ,"
Staff Reports
67, Federal Reserve Bank of New York.
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Michael Woodford, 2001.
"The Taylor Rule and Optimal Monetary Policy ,"
American Economic Review ,
American Economic Association, vol. 91(2), pages 232-237, May.
[Downloadable!] (restricted)
Taylor, John B., 2000.
"Low inflation, pass-through, and the pricing power of firms ,"
European Economic Review ,
Elsevier, vol. 44(7), pages 1389-1408, June.
[Downloadable!] (restricted)
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Rene Lalonde & Dirk Muir, 2007.
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Linda S. Goldberg & Cédric Tille, 2008.
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Staff Reports
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DNB Working Papers
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Linda S. Goldberg & Cédric Tille, 2006.
"The International Role of the Dollar and Trade Balance Adjustment ,"
NBER Working Papers
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[Downloadable!] (restricted)
Karlygash Kuralbayeva, 2007.
"Inflation persistence: Implications for a design of monetary policy in a small open economy subject to external shocks ,"
CEIS Research Paper
93, Tor Vergata University, CEIS.
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Enrique Martinez-Garcia, 2008.
"Globalization and monetary policy: an introduction ,"
Globalization and Monetary Policy Institute Working Paper
11, Federal Reserve Bank of Dallas.
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Corsetti, Giancarlo, 2006.
"Openness and the Case for Flexible Exchange Rates ,"
CEPR Discussion Papers
5612, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Other versions:
Giancarlo Corsetti, 2005.
"Openness and the case for flexible exchange rates ,"
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[Downloadable!] Corsetti, Giancarlo, 2006.
"Openness and the case for flexible exchange rates ,"
Research in Economics ,
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