International Co-operation of Monetary Policies and Confrontation of Commercial and Financial Policies: An Application to US-EC Relations and to Problems of the European Monetary System
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Problems of international economic policy are analysed in the recent literature with the help of instruments borrowed from game theory. The degree of sophistication of these analyses has been increasing, particularly with respect to the application of repeated or dynamic games and to the related issues of the time consistency of policy decisions and the consequences for the authorities’ reputation that follow from abandoning precommitted paths of economic policy. The analytical rigour in dealing with these issues has probably exceeded their practical significance, while less attention has thereby been paid to aspects that are more realistic and of greater importance in actual policy-making.
KeywordsExchange Rate Monetary Policy Social Welfare Function Monetary Authority Tariff Rate
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