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International monetary policy coordination under asymmetric shocks

The purpose of this paper is to show whether international policy coordination may be the best response to economic interdependence. We will study the short-run interactions taking pla ce among interdependent economies, where monetary supply is the instrument used to maintain output and price targets. We develop a macroeconomic model in which countries show different preferences regarding objectives and face asymmetric disturbances, analyzing in strategic terms how nonetary policy can deal with real, monetary, adn supply shocks. We also show how the superiority of the cooperative solution depends on the sources of the disturbances, the underlying economic frameword, and the asymmetry of the preferences.

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Paper provided by Departamento de Economía - Universidad Pública de Navarra in its series Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra with number 0002.

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Length: 45 pages
Date of creation: 2000
Date of revision:
Publication status: Published in
Handle: RePEc:nav:ecupna:0002
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  1. 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.
  2. Canzoneri, Matthew B, 1985. "Monetary Policy Games and the Role of Private Information," American Economic Review, American Economic Association, vol. 75(5), pages 1056-70, December.
  3. Jeffrey A. Frankel., 1987. "Obstacles to International Macroeconomic Policy Coordination," Economics Working Papers 8737, University of California at Berkeley.
  4. Patrick J. Kehoe, 1986. "Coordination of fiscal policies in a world economy," Staff Report 98, Federal Reserve Bank of Minneapolis.
  5. Beetsma Roel M.W.J. & Bovenberg A. Lans, 1995. "Monetary union without fiscal coordination may discipline policymakers," Research Memorandum 024, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  6. Douven, R.C.M.H. & Plasmans, J.E.J., 1995. "Convergence and international policy coordination in the EU : A dynamic games approach," Discussion Paper 1995-96, Tilburg University, Center for Economic Research.
  7. Giavazzi, Francesco & Pagano, Marco, 1986. "The Advantages of Tying One's Hands: EMS Discipline and Central Bank Credibility," CEPR Discussion Papers 135, C.E.P.R. Discussion Papers.
  8. Forni, Mario & Reichlin, Lucrezia, 2001. "Federal policies and local economies: Europe and the US," European Economic Review, Elsevier, vol. 45(1), pages 109-134, January.
  9. Reinhard Neck & Gottfried Haber & Warwick McKIBBIN, 1999. "Macroeconomic Policy Design in the European Monetary Union: A Numerical Game Approach," Empirica, Springer, vol. 26(4), pages 319-335, December.
  10. repec:ant:wpaper:1995012 is not listed on IDEAS
  11. Erkel-Rousse, Hélène & Melitz, Jacques, 1995. "New Empirical Evidence on the Costs of European Monetary Union," CEPR Discussion Papers 1169, C.E.P.R. Discussion Papers.
  12. Bas van Aarle & Giovanni Di Bartolomeo & Jacob Engwerda & Joseph Plasmans, 2002. "Monetary and Fiscal Policy Design in the EMU: An Overview," Open Economies Review, Springer, vol. 13(4), pages 321-340, October.
  13. Hamada, Koichi, 1976. "A Strategic Analysis of Monetary Interdependence," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 677-700, August.
  14. Carmen Díaz Roldán, 2000. "International monetary policy coordination under asymmetric shocks," Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra 0002, Departamento de Economía - Universidad Pública de Navarra.
  15. David Currie & Paul Levine, 1985. "Macroeconomic Policy Design in an Interdependent World," NBER Chapters, in: International Economic Policy Coordination, pages 228-273 National Bureau of Economic Research, Inc.
  16. Benigno, Pierpaolo, 2002. "A simple approach to international monetary policy coordination," Journal of International Economics, Elsevier, vol. 57(1), pages 177-196, June.
  17. 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.
  18. Corden, Warner Max, 1985. "Macroeconomic Policy Interaction under Flexible Exchange Rates: A Two-Country Model," Economica, London School of Economics and Political Science, vol. 52(205), pages 9-23, February.
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