Date: 2023
Type: Working Paper
The elusive gains from nationally oriented monetary policy
EUI, RSC, Working Paper, 2023/25, Pierre Werner Chair Programme
BODENSTEIN, Martin, CORSETTI, Giancarlo, GUERRIERI, Luca, The elusive gains from nationally oriented monetary policy, EUI, RSC, Working Paper, 2023/25, Pierre Werner Chair Programme - https://hdl.handle.net/1814/75447
Retrieved from Cadmus, EUI Research Repository
The gains from monetary policy cooperation depend on real and financial distortions in the economy
and evolve dynamically with prevailing economic conditions. We show that, with international trade
in assets, these gains are driven by asymmetric cross-border developments in productivity and
savings, and can reach multiples of the cost of economic fluctuations. When financial flows are
restricted to non-state-contingent bonds, the gains from cooperation grow with the size of global
imbalances, i.e., net-foreign-asset positions.
Cadmus permanent link: https://hdl.handle.net/1814/75447
ISSN: 1028-3625
Series/Number: EUI; RSC; Working Paper; 2023/25; Pierre Werner Chair Programme
Publisher: European University Institute
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