cost channel;
New Keynesian model;
productivity shocks;
terms of trade;
two-country model;
D O I:
10.3868/s060-004-015-0002-8
中图分类号:
F [经济];
学科分类号:
02 ;
摘要:
In this paper, we examine the effects of foreign productivity shocks on monetary policy in a symmetric open economy. Our two-country model incorporates the New Keynesian features of price stickiness and monopolistic competition based on the cost channel of Ravenna and Walsh (2006). In particular, in response to asymmetric productivity shocks, firms in one country achieve a more efficient level of production than those in another economy. Because the terms of trade are directly affected by changes in both economies' output levels, international trade creates a transmission channel for inflation dynamics in which a deflationary spiral in foreign producer prices reduces domestic output. When there is a decline in economic activity, the monetary authority should react to this adverse situation by lowering the key interest rate. The impulse response function from the model shows that a productivity shock can cause a real depreciation of the exchange rate when economies are closely integrated through international trade.
机构:
Univ Macau, Dept Finance & Business Econ, Fac Business Adm, Taipa, Peoples R ChinaUniv Macau, Dept Finance & Business Econ, Fac Business Adm, Taipa, Peoples R China
Gu, Xinhua
Dong, Baomin
论文数: 0引用数: 0
h-index: 0
机构:
Zhejiang Univ, Int Econ Sect, Sch Econ, Hangzhou 310003, Zhejiang, Peoples R China
Univ Int Business & Econ, Dept Econ, Beijing, Peoples R ChinaUniv Macau, Dept Finance & Business Econ, Fac Business Adm, Taipa, Peoples R China