Monday 10 Nov- 12h15 - R3
Vincenzo Cuciniello (EPFL)
Will present his paper
“International monetary policy cooperation revisited: conservatism and non-atomistic wage setting”
This paper presents a benchmark model of policy coordination in line with the New Open Economy Macroeconomics literature. I extend the analysis on non-cooperative toward cooperative solutions by incorporating non-atomistic wage setters and conservative central banks. It turns out that previous results on international monetary policy cooperation are modified such that cooperation is welfare improving. The finding in the model relies on unions' perceptions about affecting monetary policy. It is shown that under cooperation wage setters perceive a tighter monetary policy, thereby inducing stronger wage restraint.