Games for Central Bankers: Markets v/s Politics in Public Policy Decisions / Alessandra Casella.

Format:

Book

Author/Creator:

Casella, Alessandra.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w8026.

NBER working paper series no. w8026

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Games for Central Bankers

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2000.

Summary:

This paper questions the link between the establishment of a common currency among several countries and the necessity of political coordination. It begins by discussing why conducting a single monetary policy is thought to be easier within a single political unit. It then proceeds to enquire whether market mechanisms could be used to choose optimally the common policy of heterogenous actors, and thus provide an alternative to political decision-making. The advantage of market mechanisms is that they are transparent, predictable, and usually more efficient. In particular, the paper studies a simple game through which national representatives could choose the monetary policy of a single, multinational central bank. There are no fundamental logical objections or impossible practical obstacles to such market games, and even if they are rejected in principle they are useful in suggesting desirable amendments to traditional voting schemes.

Notes:

Print version record

December 2000.