Bloc Formation in International Monetary Policy Coordination

Marion Kohler

Economics Working Papers from European University Institute

Abstract: In a standard framework of international monetary policy games we show that countries will prefer to split up into several coalition blocs of a smaller size rather than forming one big coalition. Depending on the strategic position between the coalitions in an equilibrium there will be either only coalitions of the same size or the 'leading' coalition will be smaller that the 'follower' coalition. A possible application of these results is the formation of currency blocs.

Keywords: CURRENCIES; MONETARY POLICY (search for similar items in EconPapers)
JEL-codes: E52 F42 (search for similar items in EconPapers)
Pages: 74 pages
Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:eui:euiwps:eco97/31

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