Monetary Policy in the Open Economy Revisited: Price Setting and Exchange-Rate Flexibility
构建了一个基于福利的开放经济货币政策模型，研究承诺下的最优货币政策，发现当存在本地货币定价时，最优政策会导致固定汇率，即使面对国别特定冲击也是如此。
This paper develops a welfare-based model of monetary policy in an open economy. We examine the optimal monetary policy under commitment, focusing on the nature of price adjustment in determining policy. We investigate the implications of these policies for exchange-rate flexibility. The traditional approach maintains that exchange-rate flexibility is desirable in the presence of real country-specific shocks that require adjustment in relative prices. However, in the light of empirical evidence on nominal price response to exchange-rate changes—specifically, that there appears to be a large degree of local-currency pricing (LCP) in industrialized countries—the expenditure-switching role played by nominal exchange rates may be exaggerated in the traditional literature. In the presence of LCP, we find that the optimal monetary policy leads to a fixed exchange rate, even in the presence of country-specific shocks. This is true whether monetary policy is chosen cooperatively or non-cooperatively among countries. Copyright 2003, Wiley-Blackwell.