2021.05.21 BK금요세미나-김명현 교수님(성균관대)
안녕하세요, 경제학과 BK사무실입니다.
경제학과 BK21 교육연구단에서 아래와 같이 금요세미나를 개최합니다.
이번 세미나는 온라인과 오프라인 동시에 진행될 예정입니다. 많은 참여 부탁드립니다.
- 일시 : 2021년 5월 21일 (금) 16:30 - 18:00
- 발표자 : 김명현 교수님(성균관대)
- 장소: 다산경제관 32211호
- 주제 : Gains from Monetary Policy Cooperation under Dollar Pricing
- 온라인 참석 링크(WebEx) : BK사무실 문의
In most international trade transactions, the U.S. dollar is used. Hence, this paper considers optimal monetary policy in a two-country model under dollar pricing (DP) in which U.S. (Home) firms use producer currency pricing (PCP) and firms in the rest of the world (Foreign) use local currency pricing (LCP). In the DP model, there is one more inefficiency than in the LCP and PCP models: the international relative price distortion compared to the LCP model, and the distortion arising from deviations from the law of one price compared to the PCP model. Accordingly, welfare gains from monetary policy cooperation in the DP model are substantially greater than in the LCP and PCP models. Moreover, the noncooperative Foreign policymaker in the DP model can manipulate not only the international relative price but also deviations from the law of one price in favor of its own welfare through nominal exchange rate adjustment, while the noncooperative Home policymaker can control neither of the two. Thus, gains from cooperation in Home are larger compared to Foreign. This result also rationalizes the fact that the U.S. designates currency manipulators to protect its welfare. Furthermore, I find that there are substantial gains from cooperation in the DP model even under the conditions that make gains from cooperation in the LCP and PCP models disappear.