Economic Interdependence and the International Implications of Supply-Side Policies

International Monetary Fund

No 1988/071, IMF Working Papers from International Monetary Fund

Abstract: This paper analyzes the implications of growing international economic integration for the conduct of structural policy. Section I points out that the internationalization of financial intermediation has raised the welfare costs associated with domestic distortions. The growing importance of structural policies in affecting domestic demand in a more integrated world economy is discussed in Section II. It is shown that domestic distortions reduce the effect of expansionary policy on the domestic economy. Section III examines the international transmission of unilateral structural policies. Section IV discusses the need for the international coordination of structural policies. Section V identifies structural areas in which international policy coordination is most urgent.

Keywords: WP; capital; investment; rate of return; market; economy; investment-savings imbalance; activity--residential construction; demand management; durable goods; investment-saving balance; investment activity--residential construction; accelerated cost recovery system; capital mobility; capital tax; multinational company; Structural policies; Structural reforms; Supply-side policy; Government debt management; Return on investment; Global; Europe (search for similar items in EconPapers)
Pages: 28
Date: 1988-01-01
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