Designing domestic institutions for international monetary policy cooperation: A Utopia?

Détails

ID Serval
serval:BIB_86C596423AA7
Type
Article: article d'un périodique ou d'un magazine.
Collection
Publications
Titre
Designing domestic institutions for international monetary policy cooperation: A Utopia?
Périodique
Journal of International Money and Finance
Auteur⸱e⸱s
Bilbiie F.O.
ISSN
0261-5606
Statut éditorial
Publié
Date de publication
04/2011
Peer-reviewed
Oui
Volume
30
Numéro
3
Pages
393-409
Langue
anglais
Résumé
In a wide variety of international macroeconomic models monetary policy cooperation is optimal, non-cooperative policies are inefficient, but optimal policies can be attained non-cooperatively by optimal design of domestic institutions/contracts. We show that given endogenous institutional design, inefficiencies of non-cooperation cannot and will not be eliminated. We model the delegation stage explicitly and show that subgame perfect, credible contracts (chosen by governments based on individual rationality) are non-zero, but are different from optimal contracts and hence lead to inefficient equilibria. Optimal contracts require cooperation at the delegation stage, which is inconsistent with the advocated non-cooperative nature of the solution. A general solution method for credible contracts and an example from international monetary policy cooperation are considered. Our results feature delegation as an equilibrium phenomenon, explain inefficiencies of existing delegation schemes and hint to a potentially stronger role for supranational authorities in international policy coordination.
Mots-clé
International monetary policy cooperation, Institutions, Equilibrium optimal delegation, Inflation contracts, Credible, Subgame perfect contracts
Web of science
Création de la notice
01/11/2018 10:27
Dernière modification de la notice
20/08/2019 14:46
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