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The Simple Geometry of Transmission and Stabilization in Closed and Open Economies

In: NBER International Seminar on Macroeconomics 2007

  • Giancarlo Corsetti
  • Paolo Pesenti

This paper provides an introduction to the recent literature on macroeconomic stabilization in closed and open economies. We present a stylized theoretical framework, illustrating its main properties with the help of an intuitive graphical apparatus. Among the issues we discuss are optimal monetary policy and the welfare gains from macroeconomic stabilization, the international transmission of real and monetary shocks and the role of exchange rate pass-through, and the design of optimal exchange rate regimes and monetary coordination among interdependent economies.

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This chapter was published in:
  • Richard Clarida & Francesco Giavazzi, 2009. "NBER International Seminar on Macroeconomics 2007," NBER Books, National Bureau of Economic Research, Inc, number clar07-1, May.
  • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 3000.
    Handle: RePEc:nbr:nberch:3000
    Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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