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Efectos precio y comercio en un area monetaria asimetrica
[Price and trade effects in an asymmetric monetary area]


  • Carrera, Jorge Eduardo


Using a three countries model with flexible exchange rates, this study tries to analyze the situation in an asymmetric monetary area around a big country. The model consider a stochastic framework where the monetary policy is used to stabilize the inflation and the current account. The monetary policy works through the exchange rate and the interdependence is a consequence of the exchange rates spillovers (trade and prices effects). The Nash equilibrium was obtained and based on this result it is showed under wich circumstances cooperation could improve the policymakers situation. The relation between spillovers specifyes the optimal monetary policy choice between coordination or Nash (to fix the exchange rates or not) and the viability of the coordination rule.

Suggested Citation

  • Carrera, Jorge Eduardo, 1995. "Efectos precio y comercio en un area monetaria asimetrica
    [Price and trade effects in an asymmetric monetary area]
    ," MPRA Paper 7844, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:7844

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    References listed on IDEAS

    1. Dolado, Juan J. & Dolado, Juan J. & Griffiths, Mark & Padilla, A. Jorge & Padilla, A. Jorge, 1994. "Delegation in international monetary policy games," European Economic Review, Elsevier, vol. 38(5), pages 1057-1069, May.
    2. Klein, Martin, 1991. "Bargaining for the Choice of Monetary Policy Instruments in a Simple Stochastic Macro Model," CEPR Discussion Papers 553, C.E.P.R. Discussion Papers.
    3. Jorge Braga de Macedo, 1985. "Small Countries in Monetary Unions: A Two-Tier Model," NBER Working Papers 1634, National Bureau of Economic Research, Inc.
    4. Casella, Alessandra, 1992. "Participation in a Currency Union," American Economic Review, American Economic Association, vol. 82(4), pages 847-863, September.
    5. Carlo Carraro & Francesco Giavazzi, 1988. "Can International Policy Coordination Really Be Counterproductive?," NBER Working Papers 2669, National Bureau of Economic Research, Inc.
    6. Oudiz, Gilles, 1985. "European Policy Coordination: An Evaluation," CEPR Discussion Papers 81, C.E.P.R. Discussion Papers.
    7. Laskar, Daniel, 1986. "International cooperation and exchange rate stabilization," Journal of International Economics, Elsevier, vol. 21(1-2), pages 151-164, August.
    8. Matthew B. Canzoneri & Dale W. Henderson, 1991. "Monetary Policy in Interdependent Economies: A Game-Theoretic Approach," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262031787, January.
    9. Giavazzi, Francesco & Giovannini, Alberto, 1989. "Monetary Policy Interactions under Managed Exchange Rates," Economica, London School of Economics and Political Science, vol. 56(222), pages 199-213, May.
    10. Feldstein, Martin, 1991. "Does one market require one money?," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 77-84.
    11. Paul Krugman & Marcus Miller, 1992. "Exchange Rate Targets and Currency Bands," NBER Books, National Bureau of Economic Research, Inc, number krug92-1, January.
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    Cited by:

    1. Germán Reyes & Facundo Sirimarco, 2015. "Kicking the Board: Emerging Economies as an Engine of Global Economy and its Institutions," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(72), pages 185-214, June.
    2. Jorge Eduardo Carrera & Mariano Feliz & Demian Panigo & Marcelo Saavedra, 2001. "Dollarization as an Asymmetric Monetary Union. The Case of Argentina," Anais do XXIX Encontro Nacional de Economia [Proceedings of the 29th Brazilian Economics Meeting] 043, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].

    More about this item


    monetary unions; game theory; asimetry; exchange rates; Nash ; policy cooperation; three countries model;

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions


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