Delegation and Fiscal Policy in the Open Economy: More Bad News for Rogoff's Delegation Game
This article studies the open-economy Rogoff delegation game, taking into account both intra-country and intercountry interactions between fiscal authorities and central banks. With representative bankers, the Nash equilibrium of fiscal and monetary authorities independently responding to supply-side shocks sees insufficient monetary adjustment and an imbalance towards fiscal stabilization if shocks are sufficiently symmetric; the opposite occurs if shocks are sufficiently asymmetric. Appointing conservative bankers shifts the fiscal–monetary balance away from monetary towards fiscal policy. Unilateral delegation benefits that country; but when all countries independently delegate, the outcome is only favorable if shocks are sufficiently asymmetric. Copyright Kluwer Academic Publishers 2002
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.
Volume (Year): 13 (2002)
Issue (Month): 2 (April)
|Contact details of provider:|| Web page: http://www.springer.com|
|Order Information:||Web: http://www.springer.com/economics/international+economics/journal/11079/PS2|
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.:
- 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.
- Beetsma, Roel & Jensen, Henrik, 1997.
"Inflation Targets and Contracts with Uncertain Central Banker Preferences,"
CEPR Discussion Papers
1562, C.E.P.R. Discussion Papers.
- Beetsma, Roel M W J & Jensen, Henrik, 1998. "Inflation Targets and Contracts with Uncertain Central Banker Preferences," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 30(3), pages 384-403, August.
- Beetsma, R.M.W.J. & Jensen, H., 1996. "Inflation targets and contracts with uncertain central banker preferences," Discussion Paper 1996-93, Tilburg University, Center for Economic Research.
- Herrendorf, Berthold & Lockwood, Ben, 1997.
"Rogoff's "Conservative" Central Banker Restored,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 29(4), pages 476-95, November.
- Herrendorf, Berthold & Lockwood, Ben, 1996. "Rogoff's 'Conservative' Central Banker Restored," CEPR Discussion Papers 1386, C.E.P.R. Discussion Papers.
- Herrendorf, Berthold & Lockwood, Ben, 1996. "Rogoff's Conservative Central Banker Restored," The Warwick Economics Research Paper Series (TWERPS) 450, University of Warwick, Department of Economics.
- William Poole, 1969.
"Optimal choice of monetary policy instruments in a simple stochastic macro model,"
Special Studies Papers
2, Board of Governors of the Federal Reserve System (U.S.).
- William Poole, 1970. "Optimal choice of monetary policy instruments in a simple stochastic macro model," Staff Studies 57, Board of Governors of the Federal Reserve System (U.S.).
- Alesina, Alberto & Gatti, Roberta, 1995. "Independent Central Banks: Low Inflation at No Cost?," American Economic Review, American Economic Association, vol. 85(2), pages 196-200, May.
- Walsh, Carl E, 1995. "Optimal Contracts for Central Bankers," American Economic Review, American Economic Association, vol. 85(1), pages 150-67, March.
- Dolado, Juan J. & Griffiths, Mark & Padilla, Atilano Jorge, 1993.
"Delegation in International Monetary Policy Games,"
CEPR Discussion Papers
761, C.E.P.R. Discussion Papers.
- Alesina, Alberto & Summers, Lawrence H, 1993. "Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 25(2), pages 151-62, May.
- Guy Debelle & Stanley Fischer, 1994.
"How independent should a central bank be?,"
Working Papers in Applied Economic Theory
94-05, Federal Reserve Bank of San Francisco.
- Melitz, Jacques, 1997. "Some Cross-Country Evidence about Debt, Deficits and the Behaviour of Monetary and Fiscal Authorities," CEPR Discussion Papers 1653, C.E.P.R. Discussion Papers.
- Laskar Daniel, 1987.
"Conservative central bankers in a two-country world,"
CEPREMAP Working Papers (Couverture Orange)
- Laskar, Daniel, 1989. "Conservative central bankers in a two-country world," European Economic Review, Elsevier, vol. 33(8), pages 1575-1595, October.
- Kenneth Rogoff, 1985. "The Optimal Degree of Commitment to an Intermediate Monetary Target," The Quarterly Journal of Economics, Oxford University Press, vol. 100(4), pages 1169-1189.
- Currie, David & Levine, Paul & Pearlman, Joseph, 1996. "The Choice of 'Conservative' Bankers in Open Economies: Monetary Regime Options for Europe," Economic Journal, Royal Economic Society, vol. 106(435), pages 345-58, March.
- Levine, Paul, 1993. "Fiscal Policy Co-ordination under EMU and the Choice of Monetary Instrument," The Manchester School of Economic & Social Studies, University of Manchester, vol. 61(0), pages 1-12, Suppl..
- Levine, Paul & Currie, David, 1987. "Does International Macroeconomic Policy Coordination Pay and Is It Sustainable?: A Two Country Analysis," Oxford Economic Papers, Oxford University Press, vol. 39(1), pages 38-74, March.
When requesting a correction, please mention this item's handle: RePEc:kap:openec:v:13:y:2002:i:2:p:153-174. 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: (Sonal Shukla)or (Rebekah McClure)
If references are entirely missing, you can add them using this form.