Rules, Reputation and Macroeconomic Policy Coordination

Rules, Reputation and Macroeconomic Policy Coordination

by David Currie, Paul Levine
     
 

In this book David Currie and Paul Levine address a broad range of issues concerning the design and conduct of macroeconomic policy in open economies. Adopting neo-Keynesian models for which monetary and fiscal policy have short-term real effects, they analyse active stabilisatian policies in both a single- and multi-country context. Questions addressed include: the… See more details below

Overview

In this book David Currie and Paul Levine address a broad range of issues concerning the design and conduct of macroeconomic policy in open economies. Adopting neo-Keynesian models for which monetary and fiscal policy have short-term real effects, they analyse active stabilisatian policies in both a single- and multi-country context. Questions addressed include: the merits of simple policy rules, policy design in the face of uncertainty, and international policy coordination. A central feature of the book is the treatment of credibility and the effect for a policy-maker's reputation of sticking to announced policies. These considerations are integrated with coordination issues to produce a unique synthesis. The volume develops optimal control methods and dynamic game theory to handle relationships between governments and conscious rational private sectors, and produces a unified, coherent approach to the subject. This book will be of interest to students and teachers of open economy macroeconomics, and to professional economists interested in using macroeconomic models in policy design.

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Product Details

ISBN-13:
9780521104609
Publisher:
Cambridge University Press
Publication date:
11/01/2008
Pages:
444
Product dimensions:
5.98(w) x 9.02(h) x 0.98(d)

Table of Contents

Acknowledgements
Introduction1
1Macroeconomic policy design and control theory - a failed partnership?21
2International policy coordination - a survey43
3The European road to monetary union77
4The design of feedback rules in linear stochastic rational expectations models95
5Credibility and time consistency in a stochastic world122
6Should rules be simple?148
7Macroeconomic policy design using large econometric rational expectations models176
8Macroeconomic policy design in an interdependent world213
9Does international macroeconomic policy coordination pay and is it sustainable?: a two-country analysis247
10International cooperation and reputation in an empirical two-bloc model288
11Fiscal policy coordination, inflation and reputation in a natural rate world321
12The use of simple rules for international policy coordination347
13Evaluating the extended target zone proposal for the G3385
Bibliography407
Index420

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