Monetary and Exchange Rate Policy in Multisectorial Economies
AbstractWe develop a two-sector economy where each sector is classified as classical/Keynesian (contract/noncontract) in the labor market and traded/nontraded in the product market. We consider the effects of changes in monetary and exchange rate policy on sectoral and aggregate prices and outputs for different sectoral characterizations. Duca (1987) shows that nominal wage rigidity facilitates the effectiveness of monetary policy even in the classical sector. We demonstrate that trade price rigidity provides a similar path for the effectiveness of monetary policy, in this case, even when both sectors are classical.
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.
Bibliographic InfoPaper provided by University of Connecticut, Department of Economics in its series Working papers with number 1996-11.
Length: 21 pages
Date of creation: Aug 1996
Date of revision:
Publication status: Published in Journal of Economics and Business, July/August 1997.
Contact details of provider:
Postal: University of Connecticut 341 Mansfield Road, Unit 1063 Storrs, CT 06269-1063
Phone: (860) 486-4889
Fax: (860) 486-4463
Web page: http://www.econ.uconn.edu/
More information through EDIRC
multisectoral economies; monetary policy; exchange rate policy;
Other versions of this item:
- Ahmed, Habib & Miller, Stephen M., 1997. "Monetary and exchange rate policy in multisectoral economies," Journal of Economics and Business, Elsevier, vol. 49(4), pages 321-334.
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.:
- Laurence Ball & N. Gregory Mankiw & David Romer, 1988. "The New Keynsesian Economics and the Output-Inflation Trade-off," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(1), pages 1-82.
- Blinder, Alan S. & Mankiw, N. Gregory, 1984.
"Aggregation and stabilization policy in a multi-contract economy,"
Journal of Monetary Economics,
Elsevier, vol. 13(1), pages 67-86, January.
- Alan S. Blinder & N. Gregory Mankiw, 1984. "Aggregation and Stabilization Policy in a Multi-Contract Economy," NBER Working Papers 0873, National Bureau of Economic Research, Inc.
- Dimitri G. Demekas, 1990.
"Labor Market Segmentation in a Two-Sector Model of an Open Economy,"
IMF Staff Papers,
Palgrave Macmillan, vol. 37(4), pages 849-864, December.
- Dimitri G. Demekas, 1990. "Labor Market Segmentation In A Two-Sector Model Of An Open Economy," IMF Working Papers 90/33, International Monetary Fund.
- Blomqvist, A. G., 1978. "Urban job creation and unemployment in LDCs : Todaro vs. Harris and Todaro," Journal of Development Economics, Elsevier, vol. 5(1), pages 3-18, March.
- Duca, John V. & VanHoose, David D., 1990.
"Optimal monetary policy in a multisector economy with an economywide money market,"
Journal of Economics and Business,
Elsevier, vol. 42(4), pages 253-263, November.
- David D. VanHoose & John V. Duca, 1989. "Optimal monetary policy in a multisector economy with an economy-wide money market," Research Working Paper 89-14, Federal Reserve Bank of Kansas City.
- T. W.Swan, 1960. "Economic Control In A Dependent Economy," The Economic Record, The Economic Society of Australia, vol. 36(73), pages 51-66, 03.
- Bruno, Michael, 1976. "The Two-Sector Open Economy and the Real Exchange Rate," American Economic Review, American Economic Association, vol. 66(4), pages 566-77, September.
- Duca, John V, 1987. "The Spillover Effects of Nominal Wage Rigidity in a Multisector Economy: A Note," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 19(1), pages 117-21, February.
- Rodrik, Dani, 1990. "How should structural adjustment programs be designed?," World Development, Elsevier, vol. 18(7), pages 933-947, July.
- J. J. Polak, 1957. "Monetary Analysis of Income Formation and Payments Problems," IMF Staff Papers, Palgrave Macmillan, vol. 6(1), pages 1-50, November.
- R'dseth, Asbj'rn, 1979. " Macroeconomic Policy in a Small Open Economy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 81(1), pages 48-59.
- W. E. G. Salter, 1959. "Internal And External Balance: The Role Op Price And Expenditure Effects," The Economic Record, The Economic Society of Australia, vol. 35(71), pages 226-238, 08.
- Lilien, David M, 1982. "Sectoral Shifts and Cyclical Unemployment," Journal of Political Economy, University of Chicago Press, vol. 90(4), pages 777-93, August.
- Waller, Christopher J, 1992. "The Choice of a Conservative Central Banker in a Multisector Economy," American Economic Review, American Economic Association, vol. 82(4), pages 1006-12, September.
- Paul Hallwood & Ronald MacDonald, 2008. "International Money and Finance," Working papers 2008-02, University of Connecticut, Department of Economics.
- Calvo, Guillermo A, 1978. "Urban Employment and Wage Determination in LDC's: Trade Unions in the Harris-Todaro Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(1), pages 65-81, February.
- Schultze, Charles L, 1984. "Cross-Country and Cross-Temporal Differences in Inflation Responsiveness," American Economic Review, American Economic Association, vol. 74(2), pages 160-65, May.
- Craig, Gary A, 1981. "A Monetary Approach to the Balance of Trade," American Economic Review, American Economic Association, vol. 71(3), pages 460-66, June.
- Georgios Chortareas & Stephen Miller, 2004.
"Optimal Central Banker Contracts and Common Agency,"
Springer, vol. 121(1), pages 131-155, October.
- Georgios E. Chortareas & Stephen M. Miller, 2000. "Optimal Central Banker Contracts and Common Agency," Working papers 2000-03, University of Connecticut, Department of Economics, revised Jun 2002.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kasey Kniffin).
If references are entirely missing, you can add them using this form.