The Elusive Gains from Nationally Oriented Monetary Policy

Martin Bodenstein, Giancarlo Corsetti and Luca Guerrieri

The Review of Economic Studies, 2025, vol. 92, issue 2, 873-908

Abstract: The gains from monetary policy cooperation depend on real and financial distortions in the economy and evolve dynamically with prevailing economic conditions. We show that, with international trade in assets, these gains are driven by asymmetric cross-border developments in productivity and savings, and can reach multiples of the cost of economic fluctuations. When financial flows are restricted to nonstate-contingent bonds, the gains from cooperation grow with the size of global imbalances, i.e. net-foreign-asset positions.

Keywords: Monetary policy cooperation; Global imbalances; Open-loop Nash games (search for similar items in EconPapers)
Date: 2025
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Related works:
Working Paper: The Elusive Gains from Nationally-Oriented Monetary Policy (2020)
Working Paper: The Elusive Gains from Nationally-Oriented Monetary Policy (2020)
Working Paper: The Elusive Gains from Nationally-Oriented Monetary Policy (2020)
Working Paper: The Elusive Gains from Nationally-Oriented Monetary Policy (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:92:y:2025:i:2:p:873-908.

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