Working Paper: CEPR ID: DP2115
Authors: Philip R. Lane
Abstract: Since the 1995 publication of Obsteld and Rogoff's Redux model, there has been an outpouring of research on open-economy dynamic general equilibrium models that incorporate imperfect competition and nominal rigidities. This paper offers an interim survey of this recent literature.
Keywords: international macroeconomics; nominal rigidities; imperfect competition
JEL Codes: F3; F4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| monetary expansion (E50) | improvement in terms of trade (F14) |
| nominal rigidities and market imperfections (D43) | altered transmission mechanism for shocks (E32) |
| household preferences regarding home and foreign goods (D12) | effectiveness of domestic monetary expansion (E52) |
| sticky prices (D41) | differentiated effects of monetary policy (E52) |