The choice of monetary instrument in two interdependent economies under uncertainty
This paper analyzes the choice of monetary instrument in a stochastic two country setting where each country's set of monetary policy instruments includes both the money supply and the interest rate. It shows how the optimal choice of instrument is determined In two stages. First, for each pair, the minimum welfare coat for each economy is determined This defines a par of payoff matrices and the second stage involves determining the Nash equilibrium for this bimatrix game. In our illustrative example for the alternative shocks considered, a dominant Nash equilibrium is always obtained.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Turnovsky, Stephen J., 1984.
"Exchange market intervention under alternative forms of exogenous disturbances,"
Journal of International Economics,
Elsevier, vol. 17(3-4), pages 279-297, November.
- Stephen J. Turnovsky, 1984. "Exchange Market Intervention Under Alternative Forms of Exogenous Disturbances," NBER Working Papers 1289, National Bureau of Economic Research, Inc.
- William Poole, 1970. "Optimal Choice of Monetary Policy Instruments in a Simple Stochastic Macro Model," The Quarterly Journal of Economics, Oxford University Press, vol. 84(2), pages 197-216.
- Joseph Farrell, 1987. "Cheap Talk, Coordination, and Entry," RAND Journal of Economics, The RAND Corporation, vol. 18(1), pages 34-39, Spring.
- Stephen J. Turnovsky & Vasco d'Orey, 1986.
"Monetary Policies in Interdependent Economies with Stochastic Disturbances: A Strategic Approach,"
NBER Working Papers
1824, National Bureau of Economic Research, Inc.
- Turnovsky, Stephen J & d'Orey, Vasco, 1986. "Monetary Policies in Interdependent Economies with Stochastic Disturbances: A Strategic Approach," Economic Journal, Royal Economic Society, vol. 96(383), pages 696-721, September.
- Canzoneri, Matthew B & Gray, Jo Anna, 1985. "Monetary Policy Games and the Consequences of Non-cooperative Behavior," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(3), pages 547-64, October.
- Willem H. Buiter & Richard C. Marston, 1985.
"International Economic Policy Coordination,"
National Bureau of Economic Research, Inc, number buit85-1, June.
- Joshua Aizenman & Jacob A. Frenkel, 1984.
"Optimal Wage Indexation, Foreign-Exchange Intervention and Monetary Policy,"
NBER Working Papers
1329, National Bureau of Economic Research, Inc.
- Aizenman, Joshua & Frenkel, Jacob A, 1985. "Optimal Wage Indexation, Foreign Exchange Intervention, and Monetary Policy," American Economic Review, American Economic Association, vol. 75(3), pages 402-23, June.
When requesting a correction, please mention this item's handle: RePEc:eee:moneco:v:23:y:1989:i:1:p:121-133. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.