Interdependence and Monetary Policy
In examining various aspects of interdependence it is useful to distinguish two concepts — sovereignty and autonomy (Cooper (1968)).1 Sovereignty is defined as authority, firstly to form and announce economic policy decisions and, secondly, to renounce such decisions previously made. The entitlement to announce decisions is distinct from the ability of the government to carry them out. The latter may be called autonomy, and is one of the recurrent themes in this thesis. It is the ability to pursue objectives which may or may not conflict with objectives of other countries.
KeywordsExchange Rate Interest Rate Monetary Policy Money Supply Capital Flow
Unable to display preview. Download preview PDF.