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Developments in the Political Economy of Policy Coordination

  • Thomas Willett

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    Issues of macroeconomic and exchange rate policy coordination have cycled in and out of the forefront of international policy discussions a number of times over the last several decades, yet little systematic progress has been made in institutionalizing this process and both the potential benefits and costs of cordination strategies remain highly controversial. This essay reviews the recent technical and political economy literature on this subject, highlighting the major areas of consesus and disagreement. It emphasizes the importance of taking uncertainty and political economy considerations into account. Copyright Kluwer Academic Publishers 1999

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    File URL: http://hdl.handle.net/10.1023/A:1008373406841
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    Article provided by Springer in its journal Open Economies Review.

    Volume (Year): 10 (1999)
    Issue (Month): 2 (May)
    Pages: 221-253

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    Handle: RePEc:kap:openec:v:10:y:1999:i:2:p:221-253
    Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=100323

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    1. Von Furstenberg, George M. & Daniels, Joseph P., 1991. "Policy undertakings by the seven "summit" countries: ascertaining the degree of compliance," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 35(1), pages 267-307, January.
    2. C. Fred Bergsten & C. Randall Henning, 1996. "Global Economic Leadership and the Group of Seven," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 45, December.
    3. Putnam, Robert D., 1988. "Diplomacy and domestic politics: the logic of two-level games," International Organization, Cambridge University Press, vol. 42(03), pages 427-460, June.
    4. repec:cup:cbooks:9780521558839 is not listed on IDEAS
    5. Kathryn Dominguez & Jeffrey A. Frankel, 1990. "Does Foreign Exchange Intervention Work?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 16, December.
    6. Ugo Panizza, 1997. "Optimal Contracts for Central Bankers: Inflation versus Money Supply and Exchange Rate Targets," Open Economies Review, Springer, vol. 8(1), pages 5-29, January.
    7. Frankel, Jeffrey A & Rockett, Katharine E, 1988. "International Macroeconomic Policy Coordination When Policymakers Do Not Agree on the True Model," American Economic Review, American Economic Association, vol. 78(3), pages 318-40, June.
    8. Ghosh, Atish R & Masson, Paul R, 1991. "Model Uncertainty, Learning, and the Gains from Coordination," American Economic Review, American Economic Association, vol. 81(3), pages 465-79, June.
    9. Hughes Hallett, A J, 1993. "Exchange Rates and Asymmetric Policy Regimes: When Does Exchange Rate Targeting Pay?," Oxford Economic Papers, Oxford University Press, vol. 45(2), pages 191-206, April.
    10. Michael W. Klein & Eric S. Rosengren, 1991. "Foreign exchange intervention as a signal of monetary policy," New England Economic Review, Federal Reserve Bank of Boston, issue May, pages 39-50.
    11. Douglass C. North, 1990. "A Transaction Cost Theory of Politics," Journal of Theoretical Politics, , vol. 2(4), pages 355-367, October.
    12. Michael D. Bordo & Anna J. Schwartz, 1990. "What has Foreign Market Intervention Since the Plaza Agreement Accomplished?," NBER Working Papers 3562, National Bureau of Economic Research, Inc.
    13. Matthew B. Canzoneri & Dale W. Henderson, 1991. "Monetary Policy in Interdependent Economies: A Game-Theoretic Approach," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262031787, June.
    14. Kahler, Miles, 1992. "Multilateralism with small and large numbers," International Organization, Cambridge University Press, vol. 46(03), pages 681-708, June.
    15. Michael Bordo & Anna Schwartz, 1991. "What has foreign exchange market intervention since the Plaza Agreement accomplished?," Open Economies Review, Springer, vol. 2(1), pages 39-64, February.
    16. Matthew B. Canzoneri & Hali J. Edison, 1989. "A new interpretation of the coordination problem and its empirical significance," International Finance Discussion Papers 340, Board of Governors of the Federal Reserve System (U.S.).
    17. Hughes Hallett, A J, 1986. "Autonomy and the Choice of Policy in Asymmetrically Dependent Economies: An Investigation of the Gains from International Policy Co-ordination," Oxford Economic Papers, Oxford University Press, vol. 38(3), pages 516-44, November.
    18. Peter B.. Kenen, 1990. "The Coordination of Macroeconomic Policies," NBER Chapters, in: International Policy Coordination and Exchange Rate Fluctuations, pages 63-108 National Bureau of Economic Research, Inc.
    19. Fratianni, Michele & von Hagen, Juergen, 1990. "The European Monetary System ten years after," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 32(1), pages 173-241, January.
    20. Eichengreen, Barry & Ghironi, Fabio, 1995. "European Monetary Unification: The Challenges Ahead," CEPR Discussion Papers 1217, C.E.P.R. Discussion Papers.
    21. Jacob Frenkel & Morris Goldstein & Paul Masson, 1990. "The Rationale for, and Effects of, International Economic Policy Coordination," NBER Chapters, in: International Policy Coordination and Exchange Rate Fluctuations, pages 9-62 National Bureau of Economic Research, Inc.
    22. Polak, J.J., 1991. "The Changing Nature of IMF Conditionality," Princeton Studies in International Economics 184, International Economics Section, Departement of Economics Princeton University,.
    23. Gowa, Joanne, 1988. "Public goods and political institutions: trade and monetary policy processes in the United States," International Organization, Cambridge University Press, vol. 42(01), pages 15-32, December.
    24. Carlo Carraro & Francesco Giavazzi, 1988. "Can International Policy Coordination Really Be Counterproductive?," NBER Working Papers 2669, National Bureau of Economic Research, Inc.
    25. Cohen, Daniel & Wyplosz, Charles, 1989. "The European Monetary Union: An Agnostic Evaluation," CEPR Discussion Papers 306, C.E.P.R. Discussion Papers.
    26. Frieden, Jeffry A., 1991. "Invested interests: the politics of national economic policies in a world of global finance," International Organization, Cambridge University Press, vol. 45(04), pages 425-451, September.
    27. Jacques J. Polak, 1991. "The Changing Nature of IMF Conditionality," OECD Development Centre Working Papers 41, OECD Publishing.
    28. Gilles Oudiz & Jeffrey Sachs, 1984. "Macroeconomic Policy Coordination among the Industrial Economies," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 15(1), pages 1-76.
    29. Holtham, Gerald & Hughes Hallett, Andrew, 1992. "International Macroeconomic Policy Coordination When Policymakers Do Not Agree on the True Model: Comment," American Economic Review, American Economic Association, vol. 82(4), pages 1043-51, September.
    30. Jensen, Henrik, 1997. " Monetary Policy Cooperation May Not Be Counterproductive," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(1), pages 73-80, March.
    31. Hallet, A. J. Hughes, 1994. "On the imperfect substitutability of policy regimes : Exchange rate targetting vs policy coordination," Economics Letters, Elsevier, vol. 44(1-2), pages 159-164.
    32. Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
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    34. William H. Branson & Jacob A. Frenkel & Morris Goldstein, 1990. "International Policy Coordination and Exchange Rate Fluctuations," NBER Books, National Bureau of Economic Research, Inc, number bran90-1, August.
    35. Currie, David & Levine, Paul L & Vidalis, Nic, 1987. "International Cooperation and Reputation in an Empirical Two-Bloc Model," CEPR Discussion Papers 198, C.E.P.R. Discussion Papers.
    36. Caporaso, James A., 1992. "International relations theory and multilateralism: the search for foundations," International Organization, Cambridge University Press, vol. 46(03), pages 599-632, June.
    37. Hallett, A.J. Hughes, 1986. "International policy design and the sustainability of policy bargains," Journal of Economic Dynamics and Control, Elsevier, vol. 10(4), pages 467-494, December.
    38. Holtham, Gerald & Hughes Hallett, Andrew, 1987. "International Policy Cooperation and Model Uncertainty," CEPR Discussion Papers 190, C.E.P.R. Discussion Papers.
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