Efectos precio y comercio en un area monetaria asimetrica

Price and trade effects in an asymmetric monetary area

Jorge Carrera

MPRA Paper from University Library of Munich, Germany

Abstract: Using a three countries model with flexible exchange rates, this study tries to analyze the situation in an asymmetric monetary area around a big country. The model consider a stochastic framework where the monetary policy is used to stabilize the inflation and the current account. The monetary policy works through the exchange rate and the interdependence is a consequence of the exchange rates spillovers (trade and prices effects). The Nash equilibrium was obtained and based on this result it is showed under wich circumstances cooperation could improve the policymakers situation. The relation between spillovers specifyes the optimal monetary policy choice between coordination or Nash (to fix the exchange rates or not) and the viability of the coordination rule.

Keywords: monetary unions; game theory; asimetry; exchange rates; Nash; policy cooperation; three countries model (search for similar items in EconPapers)
JEL-codes: C70 C71 F32 F33 (search for similar items in EconPapers)
Date: 1995
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:7844

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