TY  - JOUR
AU  - Turnovsky,Stephen J.
AU  - Basar,Tamer
AU  - d'Orey,Vasco
TI  - Dynamic Strategic Monetary Policies and Coordination in Interdependent Economies
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2467
PY  - 1988
Y2  - October 1988
UR  - http://www.nber.org/papers/w2467
L1  - http://www.nber.org/papers/w2467.pdf
N1  - Author contact info:
Stephen Turnovsky
Department of Economics
301 Savery Hall; Mail Stop DK 30
University of Washington
Seattle, WA   98195
Tel: 206-545-8028
E-Mail: sturn@u.washington.edu
AB  - This paper develops strategic monetary policies using a standard two-country macro model under flexible exchange rates. The equilibria considered include feedback Nash and feedback Stackelberg, both of which are compared to the Pareto optimal cooperative equilibrium. The optimal policies are obtained as feedback rules in which real money supplies are adjusted to movements in the real exchange rate. The properties of these policies and their welfare implications are analyzed using numerical simulations. The contrast in the present results with those obtained previously for a short-run horizon suggest the importance of both intertemporal and intratemporal tradeoffs in the determination of optimal strategic policies.
ER  -