Data and Code for: Optimal Currency Areas with Labor Market Frictions

Principal Investigator(s): View help for Principal Investigator(s) Rohan Kekre, University of Chicago. Booth School of Business

Version: View help for Version V1

Name	File Type	Size	Last Modified
data			10/23/2020 05:37:PM
programs			10/23/2020 05:37:PM
README.pdf	application/pdf	154 KB	12/09/2020 04:45:AM

Project Citation:

Kekre, Rohan. Data and Code for: Optimal Currency Areas with Labor Market Frictions. Nashville, TN: American Economic Association [publisher], 2022. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2022-03-25. https://doi.org/10.3886/E125063V1

Project Description

Summary: Data and codes to replicate results in "Optimal Currency Areas with Labor Market Frictions". Paper abstract: I study efficiency and optimal monetary policy in a two-country monetary union with frictional labor markets. With heterogeneity in labor market frictions, the constrained efficient allocation generically cannot be achieved even if productivity shocks affecting each country are the same. The second-best optimal policy targets smaller inflation and output gaps in the more sclerotic labor market. A quantitative calibration to the Eurozone implies welfare gains from redefining the union's inflation target to put more weight on its sclerotic members.

Scope of Project

Subject Terms: Optimal Currency Areas; monetary policy; search and matching

JEL Classification:
      E52 Monetary Policy
      F45 Macroeconomic Issues of Monetary Unions
      J63 Labor Turnover; Vacancies; Layoffs

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Published Versions

V1 [2022-03-25]

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