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Financial Globalization and Monetary Policy

What does financial globalization imply for the design of monetary policy? Does the case for price stability change in an environment of large cross country gross asset holdings?. This paper is concerned with the effects of monetary policy under endogenous international portfolio choice and incomple...

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Bibliographic Details
Main Author: Devereux, Michael
Other Authors: Sutherland, Alan
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2007
Series:IMF Working Papers
Subjects:
Inflation
Institutional Investors
Stocks
Pension Funds
Finance
Financial Instruments
Deflation
Capital Market
Open Economy Macroeconomics
Currency
General Financial Markets: General (includes Measurement And Data)
Investments: Bonds
Price Level
Non-bank Financial Institutions
Government Policy
Foreign Exchange
Bonds
Investments: Stocks
Prices
Macroeconomics
Central Banks And Their Policies
Investment & Securities
Exchange Rates
Price Stabilization
Monetary Policy
Finance: General
Securities Markets
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:What does financial globalization imply for the design of monetary policy? Does the case for price stability change in an environment of large cross country gross asset holdings?. This paper is concerned with the effects of monetary policy under endogenous international portfolio choice and incomplete markets. With endogenous portfolios, monetary policy takes on new importance due to its impact on the distribution of returns on nominal assets. Surprisingly, we find an even stronger case for price stability in this environment. Even without nominal rigidities, price stability has a welfare benefit by enhancing the risk sharing capacity of nominal bond returns
Physical Description:32 pages
ISBN:9781451868425

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