Optimal Monetary Policy in Closed versus Open Economies: An Integrated ApproachRichard Clarida, Jordi Gali, Mark Gertler
NBER Working Paper No. 8604 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.
Machine-readable bibliographic record - MARC, RIS, BibTeX Document Object Identifier (DOI): 10.3386/w8604 Published: Clarida, Richard, Jordi Gali and Mark Gertler. "Optimal Monetary Policy In Open Versus Closed Economies," American Economic Review, 2001, v91(2,May), 248-252. Users who downloaded this paper also downloaded* these:
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