A Repreated Game Model of Monetary Union  

Oleh:

Dixit, Avinash

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Economic Journal (EBSCO) vol. 110 no. 466 (2000), page 759-780.
Topik: monetary union; game model; moneatry union
Fulltext: 759.pdf (343.35KB)

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: EE28.2 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

Given a policy rule of the common central bank of a monetary union, member countries with different preferences about inflation and facing asymmetric shocks have different incentives to secure political intervention in the bank's operation and achieve the temporary benefit of surprise inflation. This is modelled as a repeated game, and the most cooperative outcome subject to the countries' incentive compatibility constraints is found. The optimal rule responds flexibly to asymmetric shocks, adjusting policy away from the full commitment level toward the discretionary level, so as to maintain the worse - hit country's incentive to abide by the rule.

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