IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/2244.html
   My bibliography  Save this paper

International Macroeconomic Policy Coordination

Author

Listed:
  • Stanley Fischer

Abstract

Increasing integration of the world economy, in both trade and capital markets, holds out the promise of mutual gains to countries from the coordination of their macroeconomic policy decisions. In this paper I describe the theoretical case for coordination, evaluate empirical estimates of the potential gains, review the history of macroeconomic policy coordination, and discuss the prospects for increased coordination. The theoretical argument is seen most clearly in the consideration of fiscal expansion. Any one country that expands will create a current account deficit; all countries expanding together avoid that problem. In principle coordination is always better, but empirical estimates suggest the likely gains are small because the effects of policy in one country on the economies of other countries are small. Further, uncertainties about the effects of policy, reflected in differences among econometric models, mean that countries may have very different views on the likely outcomes of agreements--and therefore that some of them are bound to be disappointed. Information exchanges and some coordination on trade policy take place in a large number of international organizations and frameworks. But the breakdown of the Bretton Woods system suggests that international differences in policy goals are too large for systematic macroeconomic policy coordination among the major economies to take place anytime soon. Occasional agreements on particular policy packages are possible, and coordination does take place in the framework of the European Monetary System.

Suggested Citation

  • Stanley Fischer, 1987. "International Macroeconomic Policy Coordination," NBER Working Papers 2244, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:2244
    Note: ITI IFM
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w2244.pdf
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mina Baliamoune, 2000. "Economics of Summitry: An Empirical Assessment of the Economic Effects of Summits," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 27(3), pages 295-319, September.
    2. Michael T. Belongia, 1988. "Prospects for international policy coordination: some lessons from the EMS," Review, Federal Reserve Bank of St. Louis, issue Jul, pages 19-29.
    3. Hassapis, Christis & Pittis, Nikitas & Prodromidis, Kyprianos, 1999. "Unit roots and Granger causality in the EMS interest rates: the German Dominance Hypothesis revisited," Journal of International Money and Finance, Elsevier, vol. 18(1), pages 47-73, January.
    4. Patrick Artus, 1992. "Passage à l'union économique et monétaire en Europe : effets sur la croissance et les politiques budgétaires," Économie et Prévision, Programme National Persée, vol. 106(5), pages 123-137.
    5. Michele Fratianni & Juergen Hagen, 1990. "German dominance in the EMS," Open Economies Review, Springer, vol. 1(1), pages 67-87, February.
    6. Genser, Bernd, 1988. "Is there a need to coordinate fiscal policy among large industrial countries?," Discussion Papers, Series II 73, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    7. Reade, J. James & Volz, Ulrich, 2011. "Leader of the pack? German monetary dominance in Europe prior to EMU," Economic Modelling, Elsevier, vol. 28(1), pages 239-250.
    8. Julius Horvath & Magda Kandil & Subhash Sharma, 1998. "On the European monetary system: the spillover effects of German shocks and disinflation," Applied Economics, Taylor & Francis Journals, vol. 30(12), pages 1585-1593.
    9. Matthew B. Canzoneri & Hali J. Edison, 1990. "A new interpretation of the coordination problem and its empirical significance," Proceedings, Board of Governors of the Federal Reserve System (U.S.), pages 399-435.
    10. Scheide, Joachim & Sinn, Stefan, 1987. "Internationale Koordination der Wirtschaftspolitik: Pro und Contra," Kiel Discussion Papers 135, Kiel Institute for the World Economy (IfW).
    11. Caporale, Guglielmo Maria & Kalyvitis, Sarantis & Pittis, Nikitas, 1996. "Interest rate convergence, capital controls, risk premia and foreign exchange market efficiency in the EMS," Journal of Macroeconomics, Elsevier, vol. 18(4), pages 693-714.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:2244. 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: () or (Joanne Lustig). General contact details of provider: http://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.