A Monetary Union Model with Cash-in-Advance Constraints

Gulfer Cengiz, Deniz Cicek, Tolga Kuzubas, Nadide Banu Olcay and Ismail Saglam

MPRA Paper from University Library of Munich, Germany

Abstract: We characterize the monetary competitive equilibrium in a two-country monetary union model involving cash-in-advance constraints both in the factor markets and in the good markets. Simulations show that common money inflation in the union have asymmetric effects on the welfare of workers in the two countries which are technologically differentiated. We also find that the distribution of the money stock within the union may affect labor flow across the countries.

Keywords: Monetary union; cash-in-advance; monetary policy (search for similar items in EconPapers)
JEL-codes: E24 F22 (search for similar items in EconPapers)
Date: 2007-07
New Economics Papers: this item is included in nep-cba, nep-dge, nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:4248

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