NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

Monetary Policies in Interdependent Economies with Stochastic Disturbances: A Strategic Approach

Stephen J. Turnovsky, Vasco d'Orey

NBER Working Paper No. 1824 (Also Reprint No. r0827)
Issued in 1986
NBER Program(s):International Trade and Investment Program, International Finance and Macroeconomics Program

This paper analyzes strategic monetary policies using a standard two country stochastic macro model. Three noncooperative equilibria, namely Cournot, Stackelberg, and Consistent Conjectural Variations, are considered.The Pareto Optimal equilibrium, where aggregate joint costs are minimizedis also considered, and all strategic equilibria are compared to the perfectly fixed and flexible exchange rate regimes. The main conclusions obtained are:(i) Demand shocks are much less problematical than supply disturbances from the viewpoint of macro stabilization; (ii) the gains from cooperation are typically small; (iii) the strategic equilibria all show substantial margins of superiority over the fixed and flexible regimes.

download in pdf format
   (407 K)

download in djvu format
   (293 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w1824

Published: Turnovsky, Stephen J., and Vasco d'Orey. "Monetary Policies in Interdependent Economies with Stochastic Disturbances: A Strategic Approach," Economic Journal, Vol. 96, No. 3, Sept. 1986, pp. 696-721. citation courtesy of

Users who downloaded this paper also downloaded* these:
Turnovsky, Basar, and d'Orey w2467 Dynamic Strategic Monetary Policies and Coordination in Interdependent Economies
Buiter w1429 Fiscal policy in open, interdependent economies
Turnovsky and d'Orey w2604 The Choice of Monetary Instrument in Two Interdependent Economies Under Uncertainty
Barro and Gordon w1079 Rules, Discretion and Reputation in a Model of Monetary Policy
Buiter w1746 Macroeconomic Policy Design in an Interdependent World Economy: An Analysis of Three Contingencies
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us