Optimal Monetary Policy in Small Open Economies: Producer Currency Pricing

60 Pages Posted: 15 Oct 2019

See all articles by Mikhail Dmitriev

Mikhail Dmitriev

Florida State University - Department of Economics

Jonathan Hoddenbagh

Johns Hopkins University - Paul H. Nitze School of Advanced International Studies (SAIS)

Date Written: October 5, 2019

Abstract

We establish the share of exports in production as a sufficient statistic for optimal non-cooperative monetary policy. Under financial autarky, markups positively co-move with the export share. For complete markets, markups should be procyclical if the export share is procyclical. When central banks cooperate, markups are constant under complete markets, and countercyclical under financial autarky.

Keywords: Open economy macroeconomics; Optimal monetary policy; Price stability

JEL Classification: E50, F41, F42

Suggested Citation

Dmitriev, Mikhail and Hoddenbagh, Jonathan, Optimal Monetary Policy in Small Open Economies: Producer Currency Pricing (October 5, 2019). Available at SSRN: https://ssrn.com/abstract=3464872 or http://dx.doi.org/10.2139/ssrn.3464872

Mikhail Dmitriev (Contact Author)

Florida State University - Department of Economics ( email )

Tallahassee, FL 30306-2180
United States

Jonathan Hoddenbagh

Johns Hopkins University - Paul H. Nitze School of Advanced International Studies (SAIS) ( email )

1740 Massachusetts Avenue, NW
Washington, DC 20036-1984
United States

HOME PAGE: http://https://www2.bc.edu/jonathan-hoddenbagh/

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
14
Abstract Views
256
PlumX Metrics