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Monetary Policies in Interdependent Economies with Stochastic Disturbances: A Strategic Approach / Stephen J. Turnovsky, Vasco d'Orey.
- Format:
- Book
- Author/Creator:
- Turnovsky, Stephen J.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w1824.
- NBER working paper series no. w1824
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Monetary Policies in Interdependent Economies with Stochastic Disturbances
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 1986.
- Summary:
- 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.
- Notes:
- Print version record
- 1986.
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