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International Risk Sharing During the Globalization Era Akito Matsumoto

International Risk Sharing During the Globalization Era

Akito Matsumoto

Published June 30th 2004
ISBN : 9781282844155
ebook
38 pages
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 About the Book 

Monetary aggregates continue to play an important role in the ECBs policy strategy. This paper revisits the case for money, surveying the ongoing theoretical and empirical debate. The key conclusion is that an exclusive focus on non-monetary factorsMoreMonetary aggregates continue to play an important role in the ECBs policy strategy. This paper revisits the case for money, surveying the ongoing theoretical and empirical debate. The key conclusion is that an exclusive focus on non-monetary factors alone may leave the ECB with an incomplete picture of the economy. However, treating monetary factors as a separate matter is a second-best solution. Instead, a general-equilibrium inspired analytical framework that merges the economic and monetary pillars of the ECBs policy strategy appears the most promising way forward. The role played by monetary aggregates in such unified framework may be rather limited. However, an integrated framework would facilitate the presentation of policy decisions by providing a clearer narrative of the relative role of money in the interaction with other economic and financial sector variables, including asset prices, and their impact on consumer prices.