سیاست پولی از یک اقتصاد باز کوچک در زنجیره تولید جهانی

In the world production chain there is a small economy that outsources production to its upstream, sells intermediate goods to its downstream and consumes imported final goods. It is shown that in responding to shocks from demand for intermediate goods, from the wage rate in the upstream and from the currency exchange rate between the upstream and downstream countries, the monetary policy of the small country is insignificant in the sense that any attempt of changing its monetary stance to raise national welfare will be offset by the movements of exchange rates.

That an economic environment with imperfect competitions and nominal rigidities renders monetary policy influential on welfare has been shown by theoretical analyses and the optimal monetary policy is subject to characteristics of the environment.1 As world production and trade patterns evolve toward vertical integration as analyzed by Hummels et al. (1998) and Yi (2003), several articles, such as Obstfeld (2002), Chu (2005) and Shi and Xu (2007), have incorporated manufacturing and trading intermediate goods into the study. Though taking vertical integration of production into consideration, these articles share one common feature—they model countries with symmetric production, consumption and trading patterns, therefore, countries are not distinguishable according to their roles played in the world production chain.2 In contrast, I intend to build a model which contains a three-stage world production chain—the very upstream stage offers cheap labor services, the middle stage manufactures semi-finished goods, and the very downstream sells final products to feature asymmetry among countries. In particular, the country that serves the middle stage is the focus. This article employs a small-county specification for the middle-stage county and does not explicitly model interactions among countries in the same stage of the production chain which has been done more or less in the literature. Different from the literature that emphasizes the productivity shocks incurred at home and/or from the similar trading partner, this article considers other types of shocks which originate from the rest of the world and are exogenous to the small country. Due to its position in the world production chain, the middle-stage country might be affected by shocks from demand for intermediate goods, from the wage rate in the upstream and from the currency exchange rate between the upstream and downstream countries. In reality, those countries that employ cheap labor from China and/or India to produce semi-finished products sold to the USA and/or West Europe are similar to the middle-stage countries described in this model. International trade is important for the growth and welfare of those countries which are sensitive to the changes in the world economic environment but they have limited influences on the changes. For example, a small middle-stage country, such as Taiwan, Singapore and Korea, has negligible influence on the exchange rate between Dollar and Reminibi but the country's production and consumption may significantly depend on the variation of this exchange rate. Similar argument goes for the wage rates in China and/or India and for the world demand for the semi-finished products. Considering intermediate goods yields new results. For example, Obstfeld (2002) emphasizes that to achieve optimal inflation-targeting the monetary authority should not attempt to offset exchange rate fluctuations when intermediate goods are tradable but final goods are nontradable. Chu (2005) shows that whether an expansionary monetary policy or fiscal policy is beggar-thy-neighbor and welfare-improving depends on the extent of employing foreign labor force to produce semi-finished goods. Shi and Xu (2007) construct intermediate-good sector so as to investigate how stage-specific productivity shocks affect optimal monetary policy. They argue that each monetary authority should respond positively and partly to both home and foreign productivity shocks. In contrast, in this paper the monetary policy of the small middle-stage country is insignificant in the sense that any attempt of changing the monetary stance to raise welfare will be offset by the movements of exchange rates and no real effect will be generated by adjusting monetary stance. Therefore, this paper suggests an economic environment that significantly reduces the importance of monetary policy in response to the shocks from the rest of the world. The asymmetry among countries and the trade-off between blending with the world production chain and the influence of monetary policy might deserve further investigation. The article is structured as follows. Section 2 introduces the model. Section 3 derives the equilibrium given a monetary policy. Section 4 discusses the monetary policy. Section 5 concludes.

In this paper, a middle-stage country is assigned a distinct role to reflect its position in the world production chain. The multi-stage world production chain and asymmetry among countries facilitate the small-country setup which would be awkward in a symmetric two-country model. Because of the small-country setup, we can discuss shocks that do not possibly occur between symmetric large countries, and we can introduce unilateral outsourcing and triangular relationships of exchange rates in the model. From this point of view, this paper raises new issues which have not been discussed yet in this line of literature. Most importantly, this small-country model presents an environment where a monetary authority is incapable of affecting national welfare through changing its monetary stance even though there exist imperfect competition and nominal rigidity at home. The plain vanilla structure of production and consumption of the model is aimed to focus on the vertically integrated aspect of the world economy, and it suggests that some distortion other than domestic imperfect competition and price rigidity in the exporting sector is essential to render monetary policy influential for the small middle-stage country. Possible candidates might be imperfect capital mobility, nontraded good or incomplete asset markets which are generally observable in less developed small countries.