Non-neutrality of economic policy: An application of the Tinbergen-Theil’s approach to a strategic context
Nicola Acocella and
Giovanni Di Bartolomeo ()
Macroeconomics from University Library of Munich, Germany
Issues of policy effectiveness and neutrality are widespread in the economic literature. They have been increasingly raised in specific contexts within the class of LQ (linear-quadratic) policy games in the last 20 years, notably with reference to monetary policy. The more general conditions ensuring nonneutrality in a strategic environment remain however to be inquired. We fill this gap by applying the classical theory of economic policy to a strategic context. This is also useful to highlight some existence conditions for policy game solutions. We restrict ourselves to the common LQ-games in a static perfect information framework, but our simple logic can be extended to other more general situations.
Keywords: LQ-policy games; policy ineffectiveness; controllability. (search for similar items in EconPapers)
JEL-codes: C72 E52 E61 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth and nep-mac
Date: 2005-04-26, Revised 2005-04-26
Note: Type of Document - pdf; pages: 55
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Working Paper: Non-neutrality of economic policy: An application of the Tinbergen-Theil's approach to a strategic context (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpma:0504035
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