TY  - BOOK
AU  - Carlozzi,Nicholas
AU  - Taylor,John B.
ED  - National Bureau of Economic Research.
TI  - International Capital Mobility and the Coordination of Monetary Rules
T2  - NBER working paper series
PY  - 1983///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - December 1983; Hardcopy version available to institutional subscribers
N2  - The paper develops a two-country model with flexible exchange rates and perfect capital mobility, for evaluating the alternative macroeconomic policy rules. Macroeconomic performance is measured in terms of fluctuations in inflation and output. Expectations are rational, and prices are sticky; wagesetting is staggered over time. The countries are linked by aggregate spending effects, relative price effects, and mark-up pricing arrangements. The modelis solved and analyzed through deterministic and stochastic simulation techniques. The results suggest that international capital mobility is not necessarily an impediment to efficient domestic macroeconomic performance. Changes in the expected appreciation or a depreciation of the exchange rate along with differentials between real interest rates in the two countries can permit macroeconomic performance in one country to be relatively independent of the policy rule chosen by the other country. The results depend on the particular parameter values used in the model and suggest the need for further econometric work to determine the size of these parameters
UR  - https://www.nber.org/papers/w1242
UR  - http://dx.doi.org/10.3386/w1242
ER  -