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Monetary Policy Cooperation May Not Be Counterproductive
Author(s) -
Jensen Henrik
Publication year - 1997
Publication title -
scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/1467-9442.00048
Subject(s) - economics , inflation (cosmology) , monetary policy , wage , monetary economics , inflation targeting , keynesian economics , macroeconomics , labour economics , physics , theoretical physics
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.