Citation

Discussion Paper Details

Please find the details for DP4251 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: International Monetary Policy Coordination and Financial Market Integration

Author(s): Alan Sutherland

Publication Date: February 2004

Keyword(s): financial integration, monetary policy coordination and risk sharing

Programme Area(s): International Macroeconomics

Abstract: This Paper analyses the implications of financial market structure for the existence and size of welfare gains from international monetary policy coordination. Policy coordination is analysed in a two-country stochastic general equilibrium model simple enough to yield explicit analytical solutions. Welfare gains from coordination are found to be largest when: the elasticity of substitution between home and foreign goods differs from unity; international markets in state-contingent assets allow full consumption risk sharing; and asset trade takes place before monetary policy rules are determined. Welfare gains are found to be much smaller when there are no international financial markets.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=4251

Bibliographic Reference

Sutherland, A. 2004. 'International Monetary Policy Coordination and Financial Market Integration'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=4251