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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/17691| Title: | Keeping Up with the Joneses: Implications for the Welfare Effects of Monetary Policy in Open Economies |
| Keywords: | F42 F41 ddc:330 Monetary policy Consumption externality Welfare effects Geldpolitik Neue Makroökonomik offener Volkswirtschaften Offene Volkswirtschaft Allgemeines Gleichgewicht Konsuminterdependenz Wohlfahrtseffekt Theorie |
| Issue Date: | 16-Oct-2013 |
| Publisher: | Kiel Institute for the World Economy (IfW) Kiel |
| Description: | A dynamic general equilibrium two-country optimizing model is used to analyze the welfare effects of monetary policy in open economies. The distinguishing feature of the model is that households? preferences feature a "keeping up with the Joneses" effect. This effect implies that households? utility depends upon the level of their consumption relative to the aggregate level of consumption. The model implies that, depending on the strength of the "keeping up with the Joneses" effect, an expansive monetary policy can be a "beggar-thyself" policy. Moreover, the welfare effects of monetary policy are asymmetric across countries. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/17691 |
| Other Identifiers: | http://hdl.handle.net/10419/17691 ppn:364355298 |
| Appears in Collections: | EconStor |
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