The Simple Geometry of Transmission and Stabilization in Closed and Open Economies

Paolo Pesenti and Giancarlo Corsetti

No 5080, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper provides an introduction to the recent literature on macroeconomic stabilization in closed and open economies. We present a stylized theoretical framework, and illustrate its main properties with the help of an intuitive graphical apparatus. Among the issues we discuss: optimal monetary policy and the welfare gains from macroeconomic stabilization; international transmission of real and monetary shocks and the role of exchange rate pass-through; the design of optimal exchange rate regimes and monetary coordination among interdependent economies.

Keywords: Optimal monetary policy; Nominal rigidities; Exchange rate pass-through; International cooperation (search for similar items in EconPapers)
JEL-codes: E31 E52 F42 (search for similar items in EconPapers)
Date: 2005-05
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (37)

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Related works:
Chapter: The Simple Geometry of Transmission and Stabilization in Closed and Open Economies (2009)
Working Paper: The simple geometry of transmission and stabilization in closed and open economies (2005)
Working Paper: The simple geometry of transmission and stabilization in closed and open economies (2005)
Working Paper: The Simple Geometry of Transmission and Stabilization in Closed and Open Economies (2005)
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