(De-)Stabilizing two-country macroeconomic interactions in an estimated model of the U.S. and the Euro Area

Abstract:

In this paper a semi-structural macroeconomic model based on gradually adjusting wages and prices and hybrid, cross-over inflation expectation formation is analyzed and estimated with aggregate data of the U.S. and the Euro Area. Besides comparing, among other things, the determinants of the wage- and price inflation dynamics in both economies, the role of different macroeconomic transmission channels for the stability of the two-country system is investigated. © Springer-Verlag 2009.

Año de publicación:

2009

Keywords:

• Instability
• International transmission mechanisms
• Wage-and price inflation dynamics
• Monetary policy
• (D)AS-AD

Fuente:

scopus