Policy Signalling in the Open Economy: A Re-examination

Allan Drazen
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Allan Drazen: University of Maryland

Chapter 2 in Contemporary Economic Issues, 1998, pp 15-36 from Palgrave Macmillan

Abstract: Abstract The effect of economic policies is rarely exactly what was planned or intended. One reason for this is uncertainty about how economic actors (including ‘nature’) will behave and, hence, about how the economy will respond to policy. Such uncertainty means that policy-makers cannot always predict the effects of their actions. Moreover, even when policymakers feel confident that they know the structure of the economy, surprises always happen — so much so that the occurrence of a surprise should be no surprise.

Keywords: Interest Rate; Monetary Policy; Current Policy; Policy Choice; Capital Mobility (search for similar items in EconPapers)
Date: 1998
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DOI: 10.1007/978-1-349-26072-0_2

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