The new open economy macroeconomicsWord文档下载推荐.docx

1、accepted 20 December 1999 Available online 19 April 2001. AbstractSince the 1995 publication of Obsteld and Rogoffs 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 offer

2、s an interim survey of this recent literature.Author Keywords: New open economy macroeconomics; Nominal rigidities; Imperfect competitionJEL classification codes: F3; F4Article Outline1. Introduction2. Exchange rate dynamics redux3. Nominal rigidities3.1. Sticky wages 3.2. Staggering4. Market segmen

3、tation and pricing to market4.1. Pricing to market 4.2. Translog preferences5. Preferences and technology5.1. Consumption preferences 5.2. Consumption elasticity of money demand 5.3. Consumption-leisure non-separability 5.4. Adding capital 5.5. Non-traded goods and home bias6. Financial structure6.1

4、. Financial market completeness 6.2. Trading frictions7. International policy interdependence8. Introducing uncertainty9. Market structure10. The small open economy model11. Empirics11.1. Matching unconditional moments 11.2. VAR evidence 11.3. Other evidence 11.4. Parameter estimation12. Conclusions

5、AcknowledgementsReferencesThis article surveys some recent efforts to develop a new workhorse model for open-economy macroeconomic analysis.1 The unifying feature of this emerging literature is the introduction of nominal rigidities and market imperfections into a dynamic general equilibrium model w

6、ith well-specified microfoundations.Imperfect competition whether in product or factor markets is a key ingredient in the new models. One reason is that, in contrast to perfect competition （under which agents are price-takers）, monopoly power permits the explicit analysis of pricing decisions. Secon

7、d, equilibrium prices set above marginal cost rationalize demand-determined output in the short run, since firms are not losing money on the additional production.2 Third, monopoly power means that equilibrium production falls below the social optimum, which is a distortion that can potentially be c

8、orrected by activist monetary policy intervention.This approach offers several attractions. The presentation of explicit utility and profit maximization problems provides welcome clarity and analytical rigor. Moreover, it allows the researcher to conduct welfare analysis, thereby laying the groundwo

9、rk for credible policy evaluation. Allowing for nominal rigidities and market imperfections alters the transmission mechanism for shocks and also provides a more potent role for monetary policy. In this way, by addressing issues of concern to policymakers, one goal of this new strand of research is

10、to provide an analytical framework that is relevant for policy analysis and offers a superior alternative to the MundellFleming model that is still widely employed in policy circles as a theoretical reference point.In describing the findings of this research program, I focus almost exclusively on th

11、e analysis of monetary shocks. This reflects the emphasis in the literature, for the role of nominal rigidities is most starkly illustrated in the case of monetary shocks and it is this kind of disturbance that flexible-price models are least well-equipped to handle.Obstfeld and Rogoff （1995a） is co

12、mmonly recognized as the contribution that launched this new wave of research and this paper is reviewed in Section 2 below. An important precursor was the paper by Svensson and van Wijnbergen （1989）. This paper is a manifesto for sticky-price models that have solid microfoundations and are firmly e

13、mbedded in an intertemporal setting and much of the analytic structure of that paper has been adopted in the more recent literature. However, these authors modelled home and foreign outputs as stochastic endowments and the subsequent literature has devoted much more attention to endogenizing the pro

14、duction side of the economy. Krugman （1995） also signalled many of the research issues which have received attention in this new literature.Finally, it should be noted that the research program described here is very much linked to developments in closed-economy macroeconomics. There is a sense that

15、 macroeconomists are converging on a common modelling framework that integrates imperfect competition and nominal rigidities into dynamic general equilibrium models. This recent development has been labelled neomonetarism by Kimball （1995） and the new neoclassical synthesis by Goodfriend and King （1

16、997）.The rest of the paper is organized as follows. The ObstfeldRogoff Redux model is briefly outlined in Section 2. Section 3 reviews alternative approaches to modelling nominal rigidity. The impact of market segmentation and pricing to market behavior is discussed in Section 4. We turn to the spec

17、ification of preferences and technology in Section 5. Section 6 introduces variation in financial structure. The analysis of international policy interdependence is reviewed in Section 7. Section 8 discusses theoretical frameworks that explicitly allow for uncertainty and Section 9 alternative appro

18、aches to modelling market structure. Small open economy models are the subject of Section 10. Section 11 reviews the body of empirical work associated with this new research program. Section 12 concludes.As was noted in the Introduction, Obstfeld and Rogoff （1995a） effectively initiated this new res

19、earch program. 3 In this section, we briefly outline the main features of their Redux model. They set up a two-country model. Each country is populated by a continuum of yeoman-farmers （consumer-producers） that produce differentiated goods （0, n live in the home country; （n, 1 in the foreign country

20、）. Preferences for individual j in the home country are given by4（1）where , 0, 1, 01 and C is a CES index aggregating across the differentiated varieties of the consumption good（2）where is the elasticity of substitution between varieties. Goods 0, n are produced domestically and （n, 1 overseas: home

21、 and foreign goods enter symmetrically into preferences. The corresponding price index is（3）Mt/Pt are the real balances held in period t and the last term in （1） captures the disutility of work effort. There is no capital in the model. It follows from （2） that each consumer-producer faces the consta

22、nt-elasticity demand curve for his output（4）where Ctw is aggregate global consumption. Money is introduced into the economy by the government. Assuming zero government consumption, the revenue earned from money creation is returned in the form of transfers （Tt0）（5）Agents have access to an internatio

23、nal riskless real bond market at the constant interest rate r. The dynamic budget constraint is given by（6）PtBtj+Mtj=Pt（1+r）Bt1j+Mt1j+pt（z）yt（z）PtCtPtTtwhere Btj is agent js bond holding entering period t+1.Home and foreign individuals are assumed to have identical preferences and there are no barri

24、ers to trade such that the law of one price holds for each good. These assumptions mean that purchasing power parity holds and the consumption-based real exchange rate is constant.Each agent must decide her optimal choices of consumption, money holding, labor supply and set her optimal output price.

25、 Prices are assumed to be set one period in advance, introducing a nominal rigidity into the model. The solution technique is to first solve for a steady state of the model. To study the dynamic effects of a monetary shock, a log-linear approximation is taken around this steady state. Since prices a

26、re sticky for one period, the solution distinguishes between the impact （first-period） effect of a shock and its long-run steady-state effect. Accordingly, the welfare effect of a shock is calculated as the sum of the short-run change in utility and the discounted present value of the change in stea

27、dy-state utility.The authors consider the Dornbusch experiment of a unanticipated permanent increase in the domestic money supply. The impact effect of the monetary shock is an increase in the level of domestic output and consumption. The world real interest rate falls and nominal depreciation trans

28、lates into a decline in the domestic terms of trade: both factors generate an increase in foreign consumption. The impact on foreign output is ambiguous, since the increase in aggregate consumption and the relative price shift work in opposite directions. The domestic current account moves into surp

29、lus.In this case, money is not neutral in the long run. The short-run domestic current account surplus implies a permanent improvement in domestic net foreign assets. In the steady state, this implies a permanent domestic trade deficit since a positive net investment income inflow allows consumption

30、 to remain permanently above domestic output. The wealth effect of the positive net foreign asset position reduces domestic labor supply （leisure is a normal good） and domestic output, thereby generating a permanent improvement in the home countrys terms of trade.An interesting result is that exchan

31、ge rate overshooting is not possible in this model. To see this, it is useful to present the equations for PPP, consumption growth and short-run and long-run monetary equilibrium（7）（8）（9）（10）where denotes short-run values and denotes long-run values, respectively. In Eq. （7）, PPP implies that changes in the nominal exchange rate just match inflation differentials. Eq. （ 8） combines the home and foreign consumption Euler equations: since PPP holds, domestic and foreign agents face the same real interest rate and domestic and foreign consumption grow