We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
MONETARY POLICY IN EMU WITH ASYMMETRIC TRANSMISSION AND NON-TRADABLE GOODS.
- Authors
Gros, Daniel; Hefeker, Carsten
- Abstract
Which policy objective should a central bank pursue in a monetary union with asymmetric monetary transmission and different rates of inflation? Should it base its decisions on the EU-wide average of inflation and growth or should it instead focus on (appropriately weighted) national utility losses based on national rates of inflation and growth? We find that a policy which minimises the sum of national utility losses leads to higher average utility if the variability of common shocks is large relative to idiosyncratic demand shocks in the non-tradables sectors. We draw conclusions for the appropriate weight of common and national objectives in the union.
- Subjects
EUROPEAN Union. European Central Bank; MONETARY policy; CENTRAL banking industry; TRANSMISSION mechanism (Monetary policy); INTERNATIONAL economic integration; NONTRADED goods; MONETARY unions; EUROPEAN Union; ECONOMICS
- Publication
Scottish Journal of Political Economy, 2007, Vol 54, Issue 2, p268
- ISSN
0036-9292
- Publication type
Article
- DOI
10.1111/j.1467-9485.2007.00414.x