CAPITAL CONTROLS, MONETARY POLICY, AND BALANCE SHEETS IN A SMALL OPEN ECONOMY.

We develop a small open economy, New Keynesian model that incorporates a financial accelerator in combination with liability dollarization. Applying a Ramsey‐type analysis, we compare the welfare implications of an optimal monetary policy under flexible exchange rates and an optimal capital control...

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Publicado en:Economic Inquiry Vol. 56; no. 2; pp. 859 - 875
Autores principales: Kitano, Shigeto, Takaku, Kenya
Formato: Artículo
Publicado: Wiley-Blackwell Apr2018
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        atl: CAPITAL CONTROLS, MONETARY POLICY, AND BALANCE SHEETS IN A SMALL OPEN ECONOMY.
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          Kitano, Shigeto
          Takaku, Kenya
        affil:
          Professor, Research Institute for Economics and Business Administration, Kobe University, Kobe, 657‐8501, Japan
          Associate Professor, Faculty of International Studies, Hiroshima City University, Hiroshima, 731‐3194, Japan
      su:
        Capital movements
        Monetary policy
        Financial statements
        Free trade
        Foreign exchange rates
      sug:
        subj:
          Capital movements
          Monetary policy
          Financial statements
          Free trade
          Foreign exchange rates
      ab: We develop a small open economy, New Keynesian model that incorporates a financial accelerator in combination with liability dollarization. Applying a Ramsey‐type analysis, we compare the welfare implications of an optimal monetary policy under flexible exchange rates and an optimal capital control policy under fixed exchange rates. In an economy without the financial accelerator, an optimal monetary policy under flexible exchange rates is superior to an optimal capital control policy under fixed exchange rates. In contrast, in an economy with the financial accelerator, an optimal capital control under fixed exchange rates yields higher welfare than an optimal monetary policy under flexible exchange rates.(<italic>JEL</italic> E44, E52, F32, F38, F41)
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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