On the obstacles to international policy coordination
Jonathan Ostry () and
Atish Ghosh ()
Journal of International Money and Finance, 2016, vol. 67, issue C, 25-40
Notwithstanding a handful of exceptions, examples of international macro policy coordination have been few. Why is this so? We argue that the most compelling reasons are asymmetries in country size; disagreement about the economic situation and cross-border transmission effects of policies; and often policymakers' failure to recognize that they face important trade-offs across various objectives. Coordination works by allowing countries to improve the policy trade-offs they face under autarky. Like most efficiency arguments, welfare gains will not be huge (they are, in fact, very similar to estimated gains from global trade liberalization) but certainly measurable and worth pursuing. Given that uncertainty and disagreements are genuine impediments to coordination, we suggest that a neutral assessor may play a useful role in helping to bridge the divergent views of national policymakers, and that some multilateral rules of the road are likely to be needed to limit negative spillovers when coordination proves impossible to achieve.
Keywords: Policy coordination; Uncertainty; Guideposts (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:67:y:2016:i:c:p:25-40
Access Statistics for this article
Journal of International Money and Finance is currently edited by J. R. Lothian
More articles in Journal of International Money and Finance from Elsevier
Bibliographic data for series maintained by Haili He ().