Rules, discretion, and international monetary and fiscal policy coordination

Jay Bryson, Henrik Jensen and David Hoose

Open Economies Review, 1993, vol. 4, issue 2, 117-132

Abstract: This paper considers the implications of international policy coordination when both monetary and fiscal policy choices are endogenous. We show that a movement from insular monetary commitment to international monetary policy coordination will, if fiscal policies are not coordinated, produce higher output and public expenditure levels at the expense of higher inflation rates. We also show that the concurrent coordination of monetary and fiscal policies raises output and inflation while lowering public expenditure relative to a regime of monetary coordination alone. We conclude that the arguments for concurrent monetary and fiscal policy coordination fail to have a clear-cut theoretical basis. Copyright Kluwer Academic Publishers 1993

Keywords: international policy coordination (search for similar items in EconPapers)
Date: 1993
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Citations: View citations in EconPapers (14)

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DOI: 10.1007/BF01000515

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