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dc.contributor.authorSchmidt, Carolineen_US
dc.date.accessioned2011-11-01T13:36:34Z-
dc.date.available2011-11-01T13:36:34Z-
dc.date.issued2005en_US
dc.identifier.pidoi:10.3929/ethz-a-004957474en_US
dc.identifier.urihttp://hdl.handle.net/10419/50814-
dc.description.abstractHow does an unexpected domestic monetary expansion affect the foreign economy? Does it induce an increase or a decline in foreign production? In the traditional two-country Mundell-Fleming model, monetary policy has beggar-thy-neighbor effects. Yet, empirical evidence from VARs indicates that U.S. monetary policy has positive international transmission effects on both foreign (non-U.S. G-7) output and aggregate demand. In this paper, I will show that a two-country dynamic general equilibrium model with sticky prices can account for these stylized facts if we allow for international asymmetries in the price-setting behavior of firms. If U.S. firms set export prices in their own currency only (producer-currency pricing), whereas producers in the rest of the world price their exports to the U.S. in the local currency of the export market (local-currency pricing), a U.S. monetary expansion is found to increase output and aggregate demand abroad.en_US
dc.language.isoengen_US
dc.publisherKOF Zürichen_US
dc.relation.ispartofseriesArbeitspapiere // Konjunkturforschungsstelle, Eidgenössische Technische Hochschule Zürich 102en_US
dc.subject.jelF41en_US
dc.subject.jelE52en_US
dc.subject.ddc330en_US
dc.subject.keywordLocal-currency pricingen_US
dc.subject.keywordProducer-currency pricingen_US
dc.subject.keywordNew Open Economy Macroeconomicsen_US
dc.subject.keywordInternational transmission effects of monetary policyen_US
dc.subject.stwTransmissionsmechanismusen_US
dc.subject.stwGeldpolitiken_US
dc.subject.stwBetriebliche Preispolitiken_US
dc.subject.stwOffene Volkswirtschaften_US
dc.titleInternational transmission effects of monetary policy shocks: Can asymmetric price setting explain the stylized facts?en_US
dc.typeWorking Paperen_US
dc.identifier.ppn484751220en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:KOF Working Papers, KOF Konjunkturforschungsstelle, ETH Zürich

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