Monetary Policy Cooperation May Not Be Counterproductive |
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Authors: | Henrik Jensen |
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Institution: | University of Copenhagen, DK-1455 Copenhagen, Denmark |
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Abstract: | This paper qualifies Rogoff's famous (1985) result that international monetary policy cooperation is counterproductive. In a model similar to his, it is shown that if wage-setters are non-atomistic and inflation averse — as policymakers are — cooperation leads to higher employment and possibly lower inflation. |
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