Resource title

Keeping Up with the Joneses: Implications for the Welfare Effects of Monetary Policy in Open Economies

Resource image

image for OpenScout resource :: Keeping Up with the Joneses: Implications for the Welfare Effects of Monetary Policy in Open Economies

Resource description

A dynamic general equilibrium two-country optimizing model is used to analyze the welfare effects of monetary policy in open economies. The distinguishing feature of the model is that households? preferences feature a "keeping up with the Joneses" effect. This effect implies that households? utility depends upon the level of their consumption relative to the aggregate level of consumption. The model implies that, depending on the strength of the "keeping up with the Joneses" effect, an expansive monetary policy can be a "beggar-thyself" policy. Moreover, the welfare effects of monetary policy are asymmetric across countries.

Resource author

Christian Pierdzioch

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/17691

Resource license

Adapt according to the presented license agreement and reference the original author.