Global Implications of Self-Oriented National Monetary Rules

Maurice Obstfeld and Kenneth Rogoff
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Kenneth Rogoff: Department of Economics, Harvard University

No 1001, Center for International and Development Economics Research, Working Paper Series from Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley

Abstract: It is well known that if international linkages are relatively small, the potential gains to international monetary policy coordination are typically quite limited. But what if goods and financial markets are tightly linked? Is it then problematic if countries unilaterally design their institutions for monetary stabilization? Are the stabilization gains from having separate currencies largely squandered in the absence of effective international monetary coordination? We argue that under plausible assumptions the answer is no. Unless risk aversion is very high, lack of coordination in rule setting is a second-order problem compared to the overall gains from monetary policy stabilization.

Keywords: International policy coordination; international policy cooperation; monetary policy rules; policy precommitment (search for similar items in EconPapers)
Date: 2001-05-01
Note: oai:cdlib1:iber/cider-1001
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Related works:
Working Paper: Global Implications of Self-Oriented National Monetary Rules (2003)
Working Paper: Global Implications of Self-Oriented National Monetary Rules (2001)
Working Paper: Global Implications of Self-Orientated National Monetary Rules (2001)
Journal Article: Global Implications Of Self-Oriented National Monetary Rules (2002)
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Persistent link: http://EconPapers.repec.org/RePEc:cdl:ciders:1001

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