EconPapers    
Economics at your fingertips  
 

Monetary Policy and International Competitiveness

Willem Buiter and Marcus Miller

No 591, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: A model of Dornbusch is adapted to analyze the consequences for output and competitiveness of certain aspects of the U.K. government's medium term financial strategy and some other policy actions. This includes the announcement of a sequence of reductions in the target rate of monetary growth, an increase in VAT and a move to make the U.K. banking system more competitive. The impact of a discovery of domestic oil is also modeled. We consider the consequences of varying the degree of inertia in the underlying rate of inflation and of different rates of international capital mobility. A real interest rate equalization tax stabilizes the real exchange rate but not the level of output. Once and for all changes in the level of the nominal money stock to accommodate changes in the demand for real money balances prevent 'overshooting' of the real exchange rate and fluctuations in output. It may, however, undermine the credibility of an announced policy of monetary disinflation.

Date: 1980-12
Note: ITI IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Published as Buiter, Willem H. and Miller, Marcus H. "Monetary Policy and Internationalmpetitiveness: The Problems of Adjustment." Oxford Economic Papers, Vol. 33 , (July 1981, Supplement), pp. 143-175.

Downloads: (external link)
http://www.nber.org/papers/w0591.pdf (application/pdf)

Related works:
Working Paper: MONETARY POLICY AND INTERNATIONAL COMPETITIVENESS (1980) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:0591

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w0591

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2025-03-19
Handle: RePEc:nbr:nberwo:0591