TY - JOUR AU - Frenkel,Jacob A. AU - Goldstein,Morris AU - Masson,Paul R. TI - International Coordination of Economic Policies: Scope, Methods, and Effects JF - National Bureau of Economic Research Working Paper Series VL - No. 2670 PY - 1988 Y2 - July 1988 UR - http://www.nber.org/papers/w2670 L1 - http://www.nber.org/papers/w2670.pdf N1 - Author contact info: Jacob Frenkel Dr. Jacob A. Frenkel Chairman, JPMorgan Chase International 270 Park Ave 46th floor New York, NY 10017 Tel: +1 212 270 2393 Fax: +1 212 270 2397 E-Mail: jacob.frenkel@jpmchase.com Morris Goldstein Institute for International Economics 1750 Massachusetts Avenue, NW Washington, DC 20036-1903 E-Mail: mgoldstein@iie.com Paul Masson Rotman School of Management 105 St. George St. University of Toronto Toronto, ON M5S 3E6 Canada Tel: 416-946-0434 Fax: 416-978-5433 E-Mail: paul.masson@rotman.utoronto.ca AB - This paper discusses the scope, methods, the effects of international coordination of economic policies. In addressing the scope for and of coordination, the analysis covers the rationale for coordination, barriers to coordination, the range and specificity of policies to be coordinated, the frequency of coordination, and the size of the coordinating group. Turning to the methods of coordination, the emphasis is on the broad issues of rules versus discretion, single-indicator versus multi-indicator approaches, and hegemonic versus more symmetric systems. In an attempt to shed some light on the effects of alternative rule- based proposals for coordination, we present some simulations of a global macroeconomic model (MULTIMQD) developed in the International Monetary Fund. The simulations considered range from 'smoothing rules for monetary and fiscal policy that imply only minimal international coordination, to more activist "target-zone" proposals that place greater restrictions on national authorities in the conduct of monetary and/or fiscal policies. The simulation results are compared to the actual evolution of the world economy over the 1974-87 period. Our findings suggest that simple mechanistic rule-based proposals are unlikely to lead to improved performance. ER -