長崎大学経済学部

研究活動

No.2006-07(July 2006)
Inter-government Monetary Cooperation, Centralization of Monetary Policies, and International Migration of Labor
Akira SHIMADA (Associate Professor, Faculty of Economics, Nagasaki University)

Abstract:
Assuming a two-country economy with labor migration and efficiency wages, we investigate which of the two regimes―inter-government monetary cooperation between two independent monetary authorities or centralization of monetary policies by a single monetary authority under a monetary union―is advantageous under certainty and under supply or demand shocks. We show that the utility of the monetary authority does not differ across regimes under certainty, whereas centralization of the monetary policies under a monetary union tends to be advantageous to the monetary authority if a two-country economy is subject to supply or demand shocks. Further, we also show that the utility of workers does not differ across regimes under certainty and under supply or demand shocks. This suggests that in actual economies, which are interdependent on account of labor migration and are liable to be affected by shocks, centralization of the monetary policies under a monetary union appears to be preferable to inter-government monetary cooperation between the two independent monetary authorities.

Keywords:
Inter-government monetary cooperation; Monetary union; Monetary policies; International migration of labor; Efficiency wages; Two-country economy