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The Theory and Practice of International Policy Coordination: Does Coordination Pay?

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  • Currie, David
  • Holtham, Gerald
  • Hughes, Gordon

Abstract

This paper is a review of the theory and practice of international economic policy coordination. Coordination is defined as the joint control of some economic policies by several countries. We review the experience and the preferences of policymarkers for coordination since the War, and distinguish between the relative gains and the absolute gains. We then consider the evidence, from the academic literature, as to whether coordination is likely to pay, and we pick out some particular problems which make the policy design problem very difficult. Given that, we suggest a framework for coordinated policies involving a rule-based exchange rate management scheme aimed principally at capturing the gains of relative coordination.

Suggested Citation

  • Currie, David & Holtham, Gerald & Hughes, Gordon, 1989. "The Theory and Practice of International Policy Coordination: Does Coordination Pay?," CEPR Discussion Papers 325, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:325
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    Citations

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    Cited by:

    1. Lockwood, Ben, 1996. "Uniqueness of Markov-perfect equilibrium in infinite-time affine-quadratic differential games," Journal of Economic Dynamics and Control, Elsevier, vol. 20(5), pages 751-765, May.
    2. A.J. Hallet, 1998. "When Do Target Zones Work? An Examination of Exchange Rate Targeting as a Device for Coordinating Economic Policies," Open Economies Review, Springer, vol. 9(2), pages 115-138, April.
    3. Miller, Marcus & Salmon, Mark, 1990. "When does coordination pay?," Journal of Economic Dynamics and Control, Elsevier, vol. 14(3-4), pages 553-569, October.
    4. Mafusire Albert & Brixiova Zuzana, 2013. "Macroeconomic Shock Synchronization in the East African Community," Global Economy Journal, De Gruyter, vol. 13(2), pages 261-280, July.
    5. Peter Mooslechner & Martin Schuerz, 1999. "International Macroeconomic Policy Coordination: Any Lessons for EMU? A Selective Survey of the Literature," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 26(3), pages 171-199, September.
    6. Albert Mafusire & Zuzana Brixiova, 2012. "Working Paper 156 - Macroeconomic Shock Synchronization in the East African Community," Working Paper Series 432, African Development Bank.
    7. Otmar Issing, 2002. "Anmerkungen zur Koordinierung der makroökonomischen Politik in der WWU," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 71(3), pages 312-324.
    8. Fabrice Capoen & Jérôme Creel, 2007. "Efficiency of stability-oriented institutions: the European case," Sciences Po publications N°2007-06, Sciences Po.
    9. George Alogoskoufis & Richard Portes, 1990. "International Costs and Benefits from EMU," NBER Working Papers 3384, National Bureau of Economic Research, Inc.
    10. Alexander Italianer, 1999. "The Euro and Internal Economic Policy Coordination," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 26(3), pages 201-216, September.
    11. Andrew Hughes-Hallett & Patrick Minford, 1990. "Target zones and exchange rate management: A stability analysis of the European Monetary System," Open Economies Review, Springer, vol. 1(2), pages 175-200, June.

    More about this item

    Keywords

    International Policy; Policy Coordination;

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