Monetary Policy, Determinacy, and Learnability in the Open Economy

Eric Schaling () and James Bullard

No 362, Computing in Economics and Finance 2005 from Society for Computational Economics

Abstract: We study how determinacy and learnability of global rational expectations equilibrium may be affected by monetary policy in a simple, two country New Keynesian framework. We seek to understand how monetary policy choices may interact across borders to help or hinder the creation of a unique REE worldwide which can be learned by market participants. We find that open economy considerations may alter conditions for determinacy and learnability relative to closed economy analyses, and that new concerns can arise in the analysis of classic topics such as the desirability of exchange rate targeting, monetary policy cooperation, and monetary union

JEL-codes: E32 E52 (search for similar items in EconPapers)
Date: 2005-11-11
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Working Paper: Monetary policy, determinacy, and learnability in the open economy (2006)
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