what explains recent changes in international monetary policy attitudes toward inflation evidence from developed countries abstract this paper identifies source s contributing to the recent international shift in monetary policy attitudes toward inflation data from 18 developed countries suggests that this shift is connected to the universal increase in policy responses to economic openness in the 1990s

some empirical evidence on the effects of shocks to monetary policy on exchange rates this paper investigates the effects of shocks to u s monetary policy on exchange rates we consider three measures of these shocks orthogonalized shocks to the federal funds rate orthogonalized shocks to the ratio of nonborrowed to total reserves and changes in the romer and romer index of monetary policy in sharp contrast to the literature we find substantial evidence of a link between monetary policy and exchange rates specifically according to our results a contractionary shock to u s monetary policy leads to i persistent significant appreciations in u s nominal and real exchange rates and ii significant persistent deviations from uncovered interest rate parity in favor of u s interest rates

real exchange rate volatility and economic openness theory and evidence this paper relates the volatility of the trade weighted effective real exchange rate to the degree of trade openness of an economy the theoretical part presents an intertemporal monetary model of a small open economy with nominal rigidities both monetary and aggregate supply shocks are shown to produce ceteris paribus smaller real exchange rate movements if the country is more open to foreign trade empirical evidence on a cross section of forty eight countries confirms this relationship differences in trade openness explain a large part of the cross country variation in the volatility of the effective real exchange rate

openness central bank independence and the sacrifice ratio traditional explanations of the negative correlation between openness and inflation presume that an inverse relationship between the degree of openness and the sacrifice ratio reduces the inflation bias of descretionary monetary policy temple 2002 concludes however that such a relationship fails to emerge in cross country data our analysis of the same cross country data considered by temple indicates that once the degree of central bank independence and its interaction with greater openness and the sacrifice ratio in addition increased openness lessens the positive effect of central bank independence on the sacrifice ratio

does greater trade openness reduce inflation further evidence using panel data techniques abstract in this article we estimate the relation between inflation and trade openness q j econ 108 1993 869 the higher the gains in terms of product in generating an inflationary surprise the greater the incentives will be for the government to effect such a surprise

explaining peak inflation rates prior to disinflationary policy adjustments or what got us into this mess this study investigates using annual data from 1974 2004 whether unionization rates trade openness and central bank independence can help explain cross national and inter temporal variations in level of peak inflation prior to a disinflationary policy adjustment i find that unionization is positively associated with both peak inflation rates whereas more independent central banks and trade openness are correlated with lower inflation levels these results are robust to controlling for the high inflation decade of the 1970s and to using average rather than peak inflation as the explanatory variable

openness and inflation a general equilibrium model of a small open economy is developed to analyse the optimal rate of inflation under discretion once agents welfare is the sole policy objective it is possible to show that openness and inflation no longer have a simple inverse relationship a greater degree of openness may lead the policy maker to want to exploit the short run phillips curve more aggressively even if involves a smaller short run benefit because changes in export demand affect the terms of trade inflation can then be higher in a more open economy

testing commitment models of monetary policy evidence from oecd economies in ation rates in a number of oecd follow a common trend over the past four decades in ation starts out low in the 1960s rises for a time before peaking in the 1970s or early 1980s and then falls back to initial levels this similarity in the behavior of trend in ation suggests that any explanation of long run in ation trends ought to apply across oecd countries ireland 1999 shows that a simple time inconsistency model of monetary policy modifled to allow for a time varying nairu can explain long run trends in u s in ation in this paper we show that this result cannot serve as an explanation of the common trend in oecd in ation as it flts the data only in the u s we investigate two important variants of the hypothesis i that time inconsistency was an important component of central bank behavior in earlier decades but has become less signiflcant in recent years and ii that time inconsistency problems drive u s in ation which afiects in ation rates in other countries as a result of central bankers attempts to manage nominal exchange rate movements vis a vis the u s dollar we flnd that the flrst hypothesis flts the data no better than the baseline model we flnd some support for the international spillovers version of the model but the behavior of non u s central bankers with respect to domestic unemployment rates is not well described by the time inconsistency mechanism

dyke maintenance and other stories some neglected types of public goods the orthodox summation model of a pure nonexcludable public good assumes that each individual consumes a quantity of public good defined as the sum of all individuals contributions to that good recently hirshleifer 1983 1985 has analyzed models that do not fall within this class at one extreme is the weakestlink in which the total quantity available to each consumer equals the smallest individual contribution at the other is the best shot in which the total quantity available equals the largest individual contribution hirshleifer s example of the weakest link case concerns a circular region of which each citizen owns a pie shaped slice the perimeter is marked by a dyke floods may penetrate the weakest point of the dyke and cause damage equally throughout the region each citizen decides the height and state of repair of that section of the dyke adjoining his piece of land its maintenance constituting his contribution to the public good thus the level of protection enjoyed by all is determined by the least well maintained section of the dyke an example of the best shot case concerns a number of antimissile batteries ringing a city firing at an incoming icbm all that matters is the accuracy of the best shot bliss and nalebuff 1984 discuss dragon slaying as another example of a best shot situation section ii of this paper introduces a class of functions of which the summation weakest link and best shot are examples section iii analyzes the properties of equilibrium when consumers have identical tastes and incomes section iv analyzes the implications of income redistribution in the summation case the equilibrium is unaffected by the initial redistribution over a range and outside that range transfers help the recipient and hurt the donor within the broader class of models however the invariance property does not generally hold and there may be opportunities for paretoimproving income redistribution i give an example similar to the weakest link case in which a pareto improving redistribution is

openness and inflation a new assessment romer 1993 uses a barro gordon type model to argue that openness puts a check on the government s incentive to engage in unanticipated inflation because of induced exchange rate depreciation 2 therefore in the absence of precommitment in monetary policy more open economies will tend to have lower inflation rates romer finds that empirically over a large sample of countries and over a broad time frame average inflation rates are lower in smaller more open economies this relationship is significant quantitatively large and robust moreover these findings suggest that models in which the absence of precommitment in monetary policy leads to inefficiently high average levels of inflation are essential to understanding inflation in most of the world this comment suggests that the negative link between inflation and openness romer found may be largely driven by the responses of severely indebted countries sics to the debt crisis of the 1980s figures i and ii show the scatterplots of the logarithms of average inflation and openness for the subperiods 1973 to 1981 predebt crisis and 1982 to 1990 the debt crisis period different groups of countries are separated according to their indebtedness level 3 the solid lines in the figures represent the predicted value of inflation obtained from a regression of openness on inflation for the countries in each group as the scatterplots show there is indeed a strong negative relation between openness and inflation among sics during the debt crisis

a note on romer s openness inflation relation the responsiveness of as and ad to economic openness and monetary policy temple 2002 empirically challenges romer s 1993 negative openness inflation relation on empirical grounds this article links economic openness to the slopes of aggregate supply as and aggregate demand ad to explain why the openness inflation relation can be ambiguous starting with a widely used assumption initiated by romer 1993 that more open economies face greater output inflation tradeoffs we demonstrate that greater output inflation tradeoffs in more open economies reflected in the steeper as induce policymakers to adopt more aggressive optimal monetary policy reflected in the flatter ad empirical results from 15 developed countries data support our theoretical explanation on the recent empirical failure in finding the negative openness inflation relation

openness exchange rate regimes and the phillips curve abstract recent research suggests that the phillips curve slope measured using sacrifice ratios from the period 1961 88 is positively related to trade openness contradicting the romer 1993 openness and inflation theory and evidence quarterly journal of economics 108 869 903 hypothesis that disinflations are less costly in open economies in this paper i consider sacrifice ratios and output inflation trade offs from 1981 98 and allow their dependence on openness to vary with the exchange rate regime sacrifice ratios are weakly negatively related to openness but the strength of the relationship does not increase with exchange rate flexibility output inflation trade offs are negatively related to openness and the strength of the relationship increases with exchange rate flexibility

an emission saved is an emission earned an empirical study of emission banking for light duty vehicle manufacturers abstract this paper presents results of an empirical study of emission banking for light duty vehicle manufacturers an intertemporal model of manufacturers choices is combined with econometrically estimated abatement cost functions to simulate the cost savings and emission effects of an averaging trading and banking marketable permit system relative to command and control regulations while the cost savings of such a system are estimated to be modest the intertemporal emission effects may be sizable the sensitivity of the results to discount rates abatement cost functions and model specifications is also explored

exchange rate pass through openness and the sacrifice ratio abstract considerable recent work has reached mixed conclusions about whether and how globalization affects the inflation output trade off and suggests that the ultimate effect of openness on the output inflation relationship is influenced by a variety of factors in this paper we consider the impact of exchange rate pass through and examine how pass through conditions the effect of openness on the sacrifice ratio we develop a simple theoretical model showing how the extent of both pass through and openness can interact to influence the output inflation relationship next we empirically explore the nature of these two variables and their interaction results indicate that greater pass through increases the sacrifice ratio that there is statistically significant interaction between pass through and openness and once the extent of pass through is taken into account alongside other factors that affect the sacrifice ratio such as central bank independence openness fails to exert an empirically robust effect on the sacrifice ratio

does globalisation discipline monetary policymakers abstract this paper analyses globalisation using a small general equilibrium model it concludes that whether increased openness a reduction in the costs of international trade helps to discipline monetary policy in large open economies depends on the type of trade costs moreover to the extent that globalisation induces stronger competition in the goods market this may also have an adverse effect on monetary policy discipline the latter is due to international expenditure switching which becomes a more forceful channel as competition intensifies thus the answer to the question in the title is not necessarily affirmative

a review of pumped hydro energy storage development in significant international electricity markets the global effort to decarbonise electricity systems has led to widespread deployments of variable renewable energy generation technologies which in turn has boosted research and development interest in bulk electrical energy storage ees however despite large increases in research funding many electricity markets with increasingly large proportions of variable renewable generation have seen little actual bulk ees deployment while this can be partly attributed to the need for technological developments it is also due to the challenge of fairly rewarding storage operators for the range of services that storage provides to the wider network especially in markets that have undergone significant restructuring and liberalisation pumped hydroelectric energy storage phes is the overwhelmingly established bulk ees technology with a global installed capacity around 130 gw and has been an integral part of many markets since the 1960s this review provides an historical overview of the development of phes in several significant electrical markets and compares a number of mechanisms that can reward phes in different international market frameworks as well as providing up to date information about phes a primary motivation for this work is to provide an overview about the types of rewards available to bulk ees for the wider storage community including investors technology developers and policy makers observing that bulk ees projects seem to be unattractive investments for the private sector the paper also includes a brief discussion in terms of public sector investment

does plant ownership affect the level of pollution abatement expenditure this paper considers a number of hypotheses primary among them is the notion that foreign owned plants spend more on pollution abatement than do domestically owned plants after controlling for productive efficiency and cognizant of the prevailing regulatory regime the evidence drawn upon in the first econometric assessment of this contention is plant level data from the u k metal manufacturing industry in essence this study directly estimates the influence of ownership and efficiency characteristics in firms decisions regarding whether to spend or not on pollution control and how much to spend

overall review of pumped hydro energy storage in china status quo operation mechanism and policy barriers abstract with the integration of increased variable renewable energy generation and advent of liberalized electricity market much attention has been devoted on the development of pumped hydro energy storage phes as it has many prominent advantages of ensuring the safe and steady operation of power grid in china phes has met a booming periods for the last ten years currently there are 24 phes stations with an installed capacity of 16 95 gw while government s target of 2020 is 50 02 gw in this paper we provide an overall review of china s phes development with a detailed presentation of the installed capacity and distribution of existing and proposed phes stations examine 4 typical stations in order to give a good description for the practical functions of phes in power grid analyze the management mode and price mechanism of phes operation and point out the barriers in phes development in china state grid corporation of china sgcc which are making great efforts on china s phes development is discussed as a role model on that basis we suggest phes in the fast developing period should be temporarily operated and scheduled by grid companies in terms of exertion of its positive effects while government should also take responsibility to subsidize on the stations operation to relieve the price pressure of the ever growing integration of renewable energy

a new assessment of openness and inflation reply terra 1998 argues that my finding romer 1993 of a negative relationship across countries between openness and inflation is actually caused by the severely indebted countries over the debt crisis period she proposes an explanation of the openness inflation relationship based on indebted countries need to raise revenue to repay their debts the smaller a country s trade share the more depreciated the real value of the currency must be in order to generate a given trade surplus as a share of gdp and the more depreciated the currency the greater the pressure on the government s budget and thus the greater pressure to inflate in contrast in my paper i argue that the relationship stems from imperfect commitment in monetary policy the less open the economy the greater the benefits of surprise inflation and thus the higher the level of inflation in the absence of complete commitment terra has uncovered interesting variation in the opennessinflation relationship across countries and over time nonetheless i want to make three brief points that suggest that the channel she proposes accounts for only a modest part of the overall relationship first terra s results do not justify her claim that the relationship is a product only of the severely indebted countries sics during the debt crisis this can be seen from her table i for the sics the openness inflation link in the precrisis period though weaker than during the crisis is large and statistically significant the estimates for the moderately indebted countries although imprecise suggest a relationship that is very similar to that for the sics in both periods and for the less indebted countries the point estimates again suggest a negative relationship indeed for the full sample period the coefficient on openness is significantly different from zero only for the high income countries terra s all other countries is there no evidence of a negative association between openness and inflation

openness inflation and the phillips curve a puzzle models of open economies with nominal rigidities are often thought to predict a correlation between openness to trade and the slope of the output inflation trade off or phillips curve using a variety of measures of the trade off and a standard measure of openness this paper argues that the direct evidence for a correlation is not strong in turn this calls into question the usual explanation for the negative correlation between openness and inflation that was documented by romer 1993 the paper considers some alternative explanations for the romer evidence

trade openness and inflation the role of real and nominal price rigidities the paper revisits the long standing question of the impact of trade openness on the inflation output trade off by accounting for the effects of product market competition on price flexibility the study develops a new keynesian open economy dynamic stochastic general equilibrium model with non constant price elasticity of demand and calvo price setting in which the frequency of price adjustment is endogenously determined it demonstrates that trade openness has two opposing effects on the sensitivity of inflation to output fluctuations on the one hand it raises strategic complementarity in firms pricing decisions and the degree of real price rigidities which makes inflation less responsive to changes in real marginal cost on the other hand it strengthens firms incentives to adjust their prices thereby reducing the degree of nominal price rigidities and increasing the sensitivity of inflation to changes in marginal cost the study explains the positive relationship between competition and the frequency of price adjustment observed in the data it also provides new insights into the effects of global economic integration on the phillips curve

optimal wage indexation and monetary policy in an economy with imported raw materials abstract an economy s openness from the input side has important effects on the optimal design of its macroeconomic policies given the exchange rate regime the larger the share of imported raw materials in domestic production the smaller the optimal degree of wage indexation to unanticipated inflation alternatively given the wage indexation parameter the larger the share of imported raw materials in domestic production the smaller the optimal degree of foreign exchange intervention by the monetary authority the more flexible the exchange rate

review of renewable energy investment and financing in china status mode issues and countermeasures abstract with the support of national policies china s renewable energy generation industry has experienced a rapid development period and entered the world forefront level especially in the aspects of installed capacity and speed of newly installed capacity however with the rapid development of renewable energy the power generation industry is facing more and more challenges particularly in investment and financing as for wind power industry there are also some problems such as single financing channels blindness of projects investment and so on which will result in financing difficulties for some advanced projects in addition the problems for the investment of photovoltaic pv power generation leads to vicious competition and a tumble in international market thus the overcapacity of china s entire pv industry emerges generally speaking the renewable energy industry is facing a seemingly contradictory predicament of funding deficiencies and blind investment which is derived from the government centered renewable energy investment and financing this government centered mode has promoted the development of renewable energy industry in the early stage but it cannot be adapted to the requirements of sustainable development in view of these the problems of renewable energy investment and financing are deeply studied in this paper this paper proceeds as follows firstly the overview of the development of china s renewable energy industry is briefly introduced secondly the status quo of china s renewable energy investment and financing is explored in detail based on overview of the following five perspectives investment situation investment and financing bodies investment and financing means sources of funding and financing channels secondly the patterns and characteristics of renewable energy financing are summarized and a comparative analysis of wind power and photovoltaic power generation financing means is carried out finally renewable energy investment and financing issues are discussed and further feasible proposals are put forward in all this paper is of great significance in the sustainable and healthy development of china s renewable energy

monetary policy and country size abstract this paper uses a two country lucas tree model with a cash in advance constraint to investigate the impact of country size on monetary policy in the presence of externalities in this example the externality is the holding of domestic currency by foreign firms it is shown that large countries have a relatively smaller incentive to inflate than small countries cross country empirical tests show that among industrialized countries there exists a negative and significant relationship between the average of inflation rates between 1979 and 1989 and the average of both gdp and population jel e5 f4

equilibrium real exchange rate volatility and stabilization abstract this paper is composed of two parts the theoretical part studies the effect of real exchange rate rer volatility on trade using a general equilibrium framework the volatility of the rer is derived endogenously and is caused by a demand shock which may be influenced by inflation volatility the model shows that rer volatility affects positively the equilibrium rer in the empirical part the behavior of several rer volatility indexes over the last fifteen years for brazil is examined identifying the influence of stabilization plans and inflation volatility in fact inflation volatility explains most of the variation in rer volatility in brazil in addition export supply equations that include rer volatility as one of the explanatory variables are estimated for brazil for most specifications the rer volatility coefficient is negative although not significantly different from zero the implied elasticity for the most significant rer volatility coefficient is 0 05

china s new energy development status constraints and reforms abstract as the conventional energy resources are limited and environmental problems are becoming increasingly prominent new energy resources being environmental friendly and renewable are paid more and more attention by all the countries at present the development and utilization of new energy resources in china has made progress however due to the factors such as the international energy competition situation china s productivity level and its development phase and the lagging of related system and mechanism reforms china s new energy has been faced with constraints in the aspects of the system efficiency supply region and technology if related reforms were not implemented the development of new energy in china would be severely hindered for a long period of time in the future in view of this this paper reviewed the development status of china s new energy industry and analyzed five aspects of constraints moreover a discussion was carried out from four aspects of the system consumption production technology reforms in order to break the corresponding constraints finally the future development planning of new energy was presented all in all the deep investigation into china s new energy development status constraints reforms and planning in this paper is aimed at promoting the reform of new energy resources production and utilization modes improving the policy system continuously addressing the deep rooted institutional contradictions of the new energy industry and providing the reference and advice for the transformation of china s energy structure

openness the sacrifice ratio and inflation is there a puzzle abstract the standard time inconsistency based explanation for the negative correlation between openness and inflation requires an inverse relationship between the sacrifice ratio and openness but daniels et al 2005 openness central bank independence and the sacrifice ratio journal of money credit and banking 37 2 371 379 have provided evidence that controlling for central bank independence reveals a positive relationship this paper embeds the time inconsistency approach within a model of a multisector imperfectly competitive open economy in this setting greater openness raises the sacrifice ratio but reduces the inflation bias thus failure to observe an inverse relationship between openness and the sacrifice ratio does not necessarily imply that the time inconsistency approach is irrelevant to understanding the openness inflation relationship

boom crisis and adjustment the macroeconomic experience of developing countries boon crisis and adjustment reviews the macroeconomic experiences of eighteen developing countries from 1974 to 1989 the authors address why the experiences and policy reactions have differed among the countries and how their individual growth rates were affected by these policy reactions

testing monetary policy intentions in open economies 1 introductionthis article examines the relationship between economic openness and inflation performance among the most prominent research on this topic is the work by romer 1993 he demonstrates a negative relationship between economic openness and the inflation level his finding has also been viewed as supportive albeit indirectly of time consistency theory kydland and prescott 1977 1 romer 1993 argues that policymakers in more open economies have less incentive to adopt an expansionary monetary policy his argument is based on the assumption that monetary surprises in more open economies result in higher inflation for a given increase in output romer s finding that more open economies have lower inflation levels leads him to infer that this is evidence of time consistency in monetary policy practices however romer s work has not been generally accepted temple 2002 provides evidence that the openness inflation correlation does not stem from time consistency theory because the inflation level may not properly reveal the monetary authorities policy intentions temple questions this inference because it starts from a strong but unjustified assumption more open economies possess a relatively steeper phillips curve consequently temple proposes that the examination of the positive relationship between openness and the slope of the phillips curve is a fundamental condition for romer s argument he however finds little support for the positive relationship between economic openness and the slope of the phillips curve further work on the relationship of openness and monetary policy intentions comes from clarida gali and gertler 2001 2002 hereafter cgg in cgg 2001 the authors present a simple open economy model with a taylor type interest rate policy rule taylor 1993 the article concludes that the optimal monetary policy in an open economy has the same solution as that in a closed economy derived in cgg 1999 the authors also suggest that there is a direct link between the degree of economic openness and the aggressiveness of monetary policy they state that o penness does affect the parameters of the model suggesting a quantitative implication h ow aggressively a central bank should adjust the interest rate in response to inflationary pressures depends on the degree of openness cgg 2001 p 248 in subsequent work cgg 2002 revisit the issue based on a dynamic open economy new keynesian model and the role of monetary policy in open economies is refined consistent with the argument in cgg 2001 they find that the optimal monetary policy rule in an open economy is isomorphic to that in a closed economy in the nash equilibrium they also suggest that openness does not affect the optimality of a policy rule in such a scenario on the other hand economic openness does affect optimal monetary policy when the foreign optimal policy is endogenous in the domestic country s objective function this effect however is ambiguous in direction because the relationship between the degree of economic openness and the aggressiveness of monetary policy is determined by the relative size of trade and wealth effects of changes in foreign output this line of theoretical literature is limited and does not offer a definitive conclusion on the relationship between economic openness and monetary policy intentions our article provides an alternative empirical evaluation of the relationship based on prior literature we use inflation variability and persistence as the measures of monetary policy intentions one branch of the literature such as taylor 1999 cgg 2000 and owyang 2001 argues that aggressive monetary policy reduces the volatility of inflation for instance cgg 2000 estimate a forward looking taylor rule for the period between 1960 i and 1996 iv they use paul volcker s appointment as chairman of the federal reserve system as a regime shift to a more aggressive anti inflation policy stance

how has globalisation affected inflation in china this paper investigates how globalisation has affected inflation in china we estimated standard phillips curve inflation equations and examined whether globalisation has affected the structure of inflation dynamics as captured by the phillips curve empirical results suggest that the globalisation of the chinese economy has changed the behaviour of inflation dynamics in particular the impact of domestic and global output gaps on domestic inflation in china has changed significantly since 1994 before 1994 the domestic output gap was a major factor in driving domestic inflation after 1994 however the global output gap plays a significant and more important role in affecting domestic inflation the finding implies that chinese monetary authorities should specifically take into account the developments in global output in their monetary policymaking process

imported materials prices wage policy and macroeconomic stabilization this paper analyses two simple wage rules that keep employment constant when there are shocks to the prices of imported materials one rule ties nominal wages to the gnp deflator rather than the consumer price index the second rule followed by japan after the second oil price shock ties the real wage to real gnp the paper shows the effects on output real income and other macro economic variables of choosing either rule in place of the real wage stability provided by conventional wage indexation

monetary policy games inflationary bias and openness abstract when a country s central bank has higher output objectives than those of wage setters the noncooperative nash equilibrium contains an inflationary bias which is higher the flatter the economy s aggregate supply curve an economy s openness from the input side is an exogenous observable characteristic that provides a direct way of testing the theory when the imported intermediate goods displace capital labor in production a higher degree of openness flattens steepens the economy s aggregate supply curve and increases decreases the inflationary bias

globalization the output inflation tradeoff and inflation abstract this paper provides comprehensive evidence on the relation between inflation and globalization defined here as trade and financial openness using a large cross section of 91 countries over the period 1985 2004 we establish two main empirical regularities both higher trade and financial openness i reduce central banks inflation bias yielding lower average inflation and ii are associated with a larger output inflation tradeoff this evidence is at odds with the standard barro gordon framework which would require globalization to have a negative effect on the output inflation tradeoff to yield lower equilibrium inflation but it is consistent with a recent strand of new keynesian models emphasizing the role of imperfect competition and nominal rigidities our findings also support the relevance of the time inconsistency hypothesis which underlies the theoretical models predicting a relation between globalization and inflation for the oecd subsample however we do not find an effect of openness on inflation the output inflation tradeoff suggesting that these countries have created an institutional framework for central banks that eliminates distortions due to the time inconsistency problem

a new measure of trade openness trade openness popularly measured as x m gdp in the hundreds of studies published to date consistently considers the world s biggest trading countries such as the usa the uk japan and germany to be closed economies irrespective of the data set used this study suggests a composite trade share measure that more completely reflects reality by combining two important dimensions of trade openness trade share and the relative importance of a country s trade level to total world trade robustness tests support the new proposed measure in lieu of the conventional measure of openness and suggest that the latter may not only be incomplete but may also overstate the impact of trade on such things as income and the environment

inflation in open economies abstract this paper relates the time consistent inflation rate to the degree of trade openness of an economy the mechanism linking the welfare effects of monetary surprises and hence the incentives to inflate to openness does not rely on a large country terms of trade effect but rather is due to imperfect competition and nominal price rigidity in the non traded sector the empirical evidence supports the main predictions of the model 1997 elsevier science b v

the effects of separability on incentive based instrument performance abstract in this note the effects of separability between output and emissions on alternative instruments for pollution control are analyzed the potential consequences of alternative separability assumptions on both the marginal costs of control and the potential efficiency gains are illustrated

trade openness and inflation episodes in the oecd boschen and weise journal of money credit and banking 2003 model the probability of a large upturn in inflation in the oecd an inflation start we extend their work to consider the impact of trade openness on the probability of such an event the main finding is that increased openness reduces the probability of an inflation start both directly and indirectly through restricting the role of general elections in triggering inflation starts