Year: 1995
Type: article
Abstract: We develop an analytically tractable two-country model that marries a full account of global macroeconomic dynamics to a supply framework based on monopolistic competition and sticky nominal prices. The model offers simple and intuitive predictions about exchange rates and current accounts that sometimes differ sharply from those of either modern flexible-price intertemporal models or traditional sticky-price Keynesian models. Our analysis leads to a novel perspective on the international welfare spillovers due to monetary and fiscal policies.
Source: Journal of Political Economy
DOI: 10.1086/261997
Authors: Maurice Obstfeld, Kenneth Rogoff
Language: English
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2889712533