Monetary Policy in OpenEconomies: SomeNew Perspectives Maurice Obstfeld University of California, Berkele y Lecture Notes Overarching question: How should monetary policy be conducted in an open economy? Issue : Do exchange rate changes promote international adjustment? Issue : If so, how? If not, why not? Issue : What role for international policy coordination? Issue : How should we think about modeling monetary policy in aworld of rapid financial innovation? Someanswerscomefromthenewopeneconomy macroeconomics (NOEM) approach, which focuses on the integration of:
Explicit microfoundations.
Short-run nominal price/wage rigidities.
Imperfect competition and price setting.
Explicit attention to consequences of uncertainty ...

 

Economics 422: Monetary Economics Lecture Notes∗ Winter 2010 Allen Head Department of Economics Queen’s University ∗These notes draw extensively from the book, Modeling Monetary Economies, 2nd ed., by Bruce Champ and Scott Freeman, Cambridge University Press, Cambridge, 2001. 1. Introduction In this course, we will consider the institution of money, specically at money. This means that we will consider (not necessarily or exclusively in this order): 1. The reasons for the existence of money in the economy. 2. The particular characteristics of at money 3. The implications of money and the conditions that give rise to it for ...