Monetary Rules and Sectoral Unemployment in Open Economies

William Craighead

No 2012-001, Wesleyan Economics Working Papers from Wesleyan University, Department of Economics

Abstract: This paper incorporates a search-and-matching model of the labor market into a “New Open Economy Macroeconomics” framework. This allows for an examination of the behavior of tradable and nontradable sector unemployment rates under alternative monetary rules. An examination of dynamics in response to shocks to productivity, world prices and interest rates, and foreign demand suggests that monetary rules that respond to prices of domestic output rather than consumer prices may be better able to stabilize unemployment.

Keywords: search-and-matching model; monetary rules (search for similar items in EconPapers)
JEL-codes: E5 F4 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2012-08
New Economics Papers: this item is included in nep-dge, nep-mac and nep-mon
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Related works:
Journal Article: Monetary rules and sectoral unemployment in open economies (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:wes:weswpa:2012-001

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