Citation

Discussion Paper Details

Please find the details for DP14359 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: The Elusive Gains from Nationally-Oriented Monetary Policy

Author(s): Martin Bodenstein, Giancarlo Corsetti and Luca Guerrieri

Publication Date: January 2020

Keyword(s): global imbalances, monetary policy cooperation and open-loop Nash games

Programme Area(s): International Macroeconomics and Finance

Abstract: The consensus in the recent literature is that the gains from international monetary cooperation are negligible, and so are the costs of a breakdown in cooperation. However, when assessed conditionally on empirically-relevant dynamic developments of the economy, the welfare cost of moving away from regimes of explicit or implicit cooperation may rise to multiple times the cost of economic fluctuations. In economies with incomplete markets, the incentives to act non-cooperatively are driven by the emergence of global imbalances, i.e., large net-foreign-asset positions; and, in economies with complete markets, by divergent real wages.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=14359

Bibliographic Reference

Bodenstein, M, Corsetti, G and Guerrieri, L. 2020. 'The Elusive Gains from Nationally-Oriented Monetary Policy'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=14359