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Article
Optimal monetary rules and internationalized production
International Journal of Finance and Economics (2004)
  • Lilia Cavallari, University of Rome III
Abstract
This paper explores the implications of international location of production for the optimal design of monetary policy in a framework that allows for price discrimination across international markets. By introducing multinational production in a dynamic open economy, the paper shows that optimal monetary rules do not react to foreign cyclical conditions. The paper further shows that non-cooperative monetary rules cannot restore the flexible price allocation while international monetary cooperation can do so.
Disciplines
Publication Date
April, 2004
Citation Information
Lilia Cavallari. "Optimal monetary rules and internationalized production" International Journal of Finance and Economics Vol. 9 Iss. 2 (2004)
Available at: http://works.bepress.com/lilia_cavallari/3/