NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Do We Really Need a New International Monetary Compact?

Maurice Obstfeld, Kenneth Rogoff

NBER Working Paper No. 7864
Issued in August 2000
NBER Program(s):   IFM   ME

In recent years, many countries have instituted monetary reforms aimed at improving anti-inflation credibility. Is it a problem, however, that international welfare spillover effects seldom receive much consideration in the design of monetary reforms? Surprisingly, the answer may be no. Under plausible conditions, as domestic rules improve and international financial markets become more complete, the Nash and cooperative monetary rule setting games converge. We base our analysis on a utility-theoretic sticky-wage (new open economy macroeconomics) model; the question we pose simply could not have been adequately formulated using earlier models of monetary cooperation.

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Document Object Identifier (DOI): 10.3386/w7864

Published: Obstfeld, Maurice and Kenneth Rogoff. "Global Implications of Self-Oriented National Monetary Rules." Quarterly Journal of Economics, May 2002.

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