<?xml version="1.0" encoding="UTF-8"?><xml><records><record><source-app name="Biblio" version="7.x">Drupal-Biblio</source-app><ref-type>17</ref-type><contributors><authors><author><style face="normal" font="default" size="100%">Liutang Gong</style></author><author><style face="normal" font="default" size="100%">Chan Wang</style></author><author><style face="normal" font="default" size="100%">Heng-fu Zou</style></author></authors></contributors><titles><title><style face="normal" font="default" size="100%">Optimal monetary policy with international trade in intermediate inputs</style></title><secondary-title><style face="normal" font="default" size="100%">Journal of International Money and Finance</style></secondary-title></titles><dates><year><style  face="normal" font="default" size="100%">2016</style></year></dates><urls><web-urls><url><style face="normal" font="default" size="100%">https://www.sciencedirect.com/science/article/pii/S0261560616300183</style></url></web-urls></urls><volume><style face="normal" font="default" size="100%">65</style></volume><pages><style face="normal" font="default" size="100%">140-165</style></pages><language><style face="normal" font="default" size="100%">eng</style></language><abstract><style face="normal" font="default" size="100%">&lt;p&gt;&lt;span&gt;This paper examines optimal monetary policy in a two-country New Keynesian model with international trade in intermediate inputs. We derive the loss function of a cooperative monetary policymaker and find that the optimal monetary policy must target intermediate-goods price inflation rates, final-goods price inflation rates, final-goods output gaps, and relative-price gaps. We use the welfare loss under the optimal monetary policy as a benchmark to evaluate the welfare implications of three Taylor-type monetary policy rules. A main finding is that the degree of price stickiness at the stage of intermediate-goods production is a key factor to determine which policy rule should be followed. Specifically, when the degree of price stickiness at the stage of intermediate-goods production is high, the policymaker should follow intermediate-goods PPI-based Taylor rule, whereas CPI-based Taylor rule should be followed when the degree of price stickiness at the stage of intermediate-goods production is intermediate or low.&lt;/span&gt;&lt;/p&gt;</style></abstract></record></records></xml>