Type: Working Paper
The Simple Geometry of Transmission and Stabilization in Closed and Open Economies
Working Paper, CEPR Discussion Paper, 5080
CORSETTI, Giancarlo, PESENTI, Paolo, The Simple Geometry of Transmission and Stabilization in Closed and Open Economies, CEPR Discussion Paper, 5080 - http://hdl.handle.net/1814/4298
Retrieved from Cadmus, EUI Research Repository
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.
Cadmus permanent link: http://hdl.handle.net/1814/4298
Series/Number: CEPR Discussion Paper; 5080
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