On policy interactions among nations: when do cooperation and commitment matter ?

Hubert Kempf () and Leopold Von Thadden ()
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Leopold Von Thadden: European Central Bank - ECB

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: This paper offers a framework to study commitment and cooperation issues in games with multiple policymakers. To reconcile some puzzles in the recent literature on the nature of policy interactions among nations, we prove that games characterized by different commitment and cooperation schemes can admit the same equilibrium outcome if certain spillover effects vanish at the common solution of these games. We provide a detailed discussion of these spillovers, showing that, in general, commitment and cooperation are non-trivial issues. Yet, in linear-quadratic models with multiple policymakers commitment and cooperation schemes are shown to become irrelevant under certain assumptions. The framework is sufficiently general to cover a broad range of results from the recent literature on policy interactions as special cases, both within monetary unions and among fully sovereign nations.

Keywords: policy mix; Credibility; commitment; monetary policy; fiscal policy; policy mix.; Crédibilité; pré-engagement; politique monétaire; politique fiscale; union monétaire. (search for similar items in EconPapers)
Date: 2008-11
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00344773
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Citations: View citations in EconPapers (6)

Published in 2008

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Related works:
Working Paper: On policy interactions among nations: when do cooperation and commitment matter ? (2008)
Working Paper: On policy interactions among nations: when do cooperation and commitment matter? (2008)
Working Paper: On Policy Interactions Among Nations: When Do Cooperation and Commitment Matter? (2008)
Working Paper: On policy interactions among nations: when do cooperation and commitment matter? (2008)
Working Paper: On policy interactions among nations: when do cooperation and commitment matter ? (2008)
Working Paper: On policy interactions among nations: when do cooperation and commitment matter? (2008)
Working Paper: On policy interactions among nations: when do cooperation and commitment matter ? (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:halshs-00344773

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