Optimal Monetary Policy in a Small Open Economy with Home Bias
分析存在消费本土偏好的小型开放经济中的最优货币政策，发现本土偏好是央行偏离严格价格稳定、进行适度汇率稳定的充分条件，并考察了价格刚性下本土偏好对通胀和汇率波动的影响。
We analyze optimal monetary policy in a small open economy characterized by home bias in consumption. Peculiar to our framework is the application of a Ramsey‐type analysis to a model of the recent open‐economy New Keynesian literature. We show that home bias in consumption is a sufficient condition for inducing the monetary policymaker of an open economy to deviate from a strategy of strict markup stabilization and contemplate some (optimal) degree of exchange rate stabilization. We focus on the optimal setting of policy both in the case of firms setting prices one period in advance and in a gradual fashion subject to adjustment costs. While the first setup allows us to analytically highlight home bias as an independent source of equilibrium markup variability, the second setup allows to study the effects of future expectations on the optimal policy problem and the effect of home bias on optimal inflation volatility. The latter, in particular, is shown to be related to the degree of trade openness in a U‐shaped fashion, whereas exchange rate volatility is monotonically decreasing in openness.