Pegs, Downward Wage Rigidity, and Unemployment: The Role of Financial Structure
AbstractThis paper studies the relationship between financial structure and the welfare consequences of fixed exchange rate regimes in small open emerging economies with downward nominal wage rigidity. The paper presents two surprising results. First, a pegging economy might be better off with a closed than with an open capital account. Second, the welfare gain from switching from a peg to the optimal (full-employment) monetary policy might be larger in financially open economies than in financially closed ones.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18223.
Date of creation: Jul 2012
Date of revision:
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Find related papers by JEL classification:
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-07-23 (All new papers)
- NEP-MON-2012-07-23 (Monetary Economics)
- NEP-OPM-2012-07-23 (Open Economy Macroeconomics)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Roger E.A. Farmer, 2012.
"The Evolution of Endogenous Business Cycles,"
NBER Working Papers
18284, National Bureau of Economic Research, Inc.
- Farmer, Roger E A, 2012. "The Evolution of Endogenous Business Cycles," CEPR Discussion Papers, C.E.P.R. Discussion Papers 9080, C.E.P.R. Discussion Papers.
- Roger E. A. Farmer, 2012. "The Evolution of Endogenous Business Cycles," Working Papers, Hong Kong Institute for Monetary Research 302012, Hong Kong Institute for Monetary Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.