International Policy Cooperation and Model Uncertainty
The main obstacles to coordinating policies in practice are uncertainty about the correct model to use for policy design, and uncertainty about external variables. This paper examines the former problem. Numerical calculations using ten models from the recent Brookings Multicountry comparison exercise showed both policies and the gains to coordination are quite sensitive to model variations - and hence to model errors. A framework is therefore set up in which policy-makers are able to choose their model and their policies jointly in order to try and protect the gains from coordination from potential model misspecifications and/or disagreements over which model is most appropriate. That produces an alternative policy bargaining system and better results in terms of the success of coordination.
|Date of creation:||Jul 1987|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:190. 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: ()The email address of this maintainer does not seem to be valid anymore. Please ask to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.