DP761 Delegation in International Monetary Policy Games
|Author(s):||Juan J. Dolado, Mark Griffiths, Atilano Jorge Padilla|
|Publication Date:||February 1993|
|Keyword(s):||Delegation, International Economy, Monetary Policy, Spillovers|
|JEL(s):||E52, E58, F33|
|Programme Areas:||International Macroeconomics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=761|
In this paper we show that the delegation of monetary policy to an independent and more conservative central banker is an optimal policy in an international context with monetary spillovers between countries, even in the absence of time inconsistency (credibility) issues. We also study the welfare implications of delegating monetary policy and extend our analysis to incorporate the coordination of monetary policies.