TY  - JOUR
AU  - Clarida,Richard
AU  - Gali,Jordi
AU  - Gertler,Mark
TI  - Optimal Monetary Policy in Closed versus Open Economies: An Integrated Approach
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8604
PY  - 2001
Y2  - November 2001
UR  - http://www.nber.org/papers/w8604
L1  - http://www.nber.org/papers/w8604.pdf
N1  - Author contact info:
Richard H. Clarida
Columbia University
420 West 118th Street
Room 1111, IAB
New York, NY  10027
Tel: 212/854-3676
Fax: 212/854-8059
E-Mail: rhc2@columbia.edu

Jordi Gali
Centre de Recerca en Economia Internacional (CREI)
Ramon Trias Fargas 25
08005 Barcelona
SPAIN
Tel: 011-34-93-5422754
Fax: 011-34-93-5421860
E-Mail: jgali@crei.cat

Mark Gertler
Department of Economics
New York University
269 Mercer Street, 7th Floor
New York, NY 10003
Tel: 212/998-8931
Fax: 212/995-4186
E-Mail: mark.gertler@nyu.edu
AB  - This paper develops a new open economy macro model of optimal monetary for a small open economy.  Our main result is that in this model, the optimal policy problem for the small open economy is isomorphic to the closed economy case studied in Clarida, Gali, Gertler (1999).  In particular, the optimal policy can be implemented with a Taylor Rule under which the domestic interest rate adjusts to the equilibrium real interest rate and expected inflation in domestic prices.
ER  -