Global Implications of Self-Orientated National Monetary Rules

Maurice Obstfeld and Kenneth S Rogoff

No 2856, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: It is well known that if international linkages are relatively small, the potential gains to international monetary policy coordination are typically quite limited. What if, however, 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; monetary institutions; monetary policy rules (search for similar items in EconPapers)
JEL-codes: E42 F33 F42 (search for similar items in EconPapers)
Date: 2001-06

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Related works:
Working Paper: Global Implications of Self-Oriented National Monetary Rules (2001)
Working Paper: Global Implications of Self-Oriented National Monetary Rules (2003)
Working Paper: Global Implications of Self-Oriented National Monetary Rules (2001)
Journal Article: Global Implications Of Self-Oriented National Monetary Rules (2002)
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