Open Economies Review

, Volume 4, Issue 2, pp 117–132

Rules, discretion, and international monetary and fiscal policy coordination

  • Jay H. Bryson
  • Henrik Jensen
  • David D. van Hoose
Article

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.

Key words

international policy coordination 

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Copyright information

© Kluwer Academic Publishers 1993

Authors and Affiliations

  • Jay H. Bryson
    • 1
  • Henrik Jensen
    • 2
  • David D. van Hoose
    • 1
  1. 1.University of AlabamaTuscaloosaUSA
  2. 2.University of AarhusDenmark

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