Abstract
We establish the share of exports in production as a sufficient statistic for optimal noncooperative monetary policy. Under financial autarky, markups positively co-move with the export share. For complete markets, markups should be procyclical if the export share is procyclical. When central banks cooperate, markups are constant under complete markets, and countercyclical under financial autarky.
Authors
- Mikhail Dmitriev
- Jonathan Hoddenbagh
JEL codes
- E50
- F41
- F42