Macroeconomic Policy Coordination among the Industrial Economies

Abstract

Industrial Economies THE TURBULENT EVENTS in the world economy since 1973 have several times prompted the call for the major countries in the Organization for Economic Cooperation and Development (OECD) to coordinate their macroeconomic policies.I In the immediate aftermath of the 1973 oil We would like to thank Peter Hooper of the Board of Governors of the Federal Reserve System, Stephen Marris and John Williamson of the Institute for International Economics, and members of the Brookings Panel for helpful discussions. Data Resources, Inc., generously made available computer facilities for this study. The paper was written while Gilles Oudiz was a visiting scholar at the Massachusetts Institute of Technology, and he gratefully acknowledges the financial support of the North Atlantic Treaty Organization and the Fulbright fellowship program during this visit. 1. For useful discussions of the policy coordination debate in the context of the economic summit meetings, see George de Menil and Anthony M.

Changing Nature of North-South Linkages: Stylized Facts and Explanations

“…For example, according to the traditional models based on trade multiplier mechanisms, our findings would suggest a growing need for international policy coordination (Oudiz and Sachs, 1984). In these models, international policy coordination can result in sizeable welfare gains if the degree of integration of goods and assets markets is high.…”

Transmissão De Política Macroeconômica: O Caso De Brasil E Alemanha

“…De acordo com Cooper (1969), o interesse pelos ganhos derivados da coordenação de políticas econômicas e como estes ganhos variam de acordo com o grau de interdependência econômica advêm do "great increase in international capital movements which took place after 1958, and the high sensitivity of some of these capital movements to interest rates" 2 (Cooper 1969: 1 (Oudiz;Sachs 1984: 5). Assim, apesar dos modelos teóricos demonstrarem possibilidade de ganhos com a coordenação, os resultados empíricos sugerem que os ganhos são pequenos e sob incerteza estes podem se reduzir, especialmente, considerando as assimetrias entre os países.…”

On the Contingency of Equilibrium Exchange Rates with Time Consistent Economic Policies

“…2 There is no inconsistency of optimal plans in the meaning of Kydland and Prescott (1977). See also Oudiz and Sachs (1984). and external equilibriums.…”

“…If we assume that both authorities follow a predetermined rule (such as a Taylor rule for the CB, and a rule stabilizing output and debt for the government), the model is usually time-inconsistent (it matches the closed-loop model case of Oudiz and Sachs (1984)). Policymakers have an incentive to modify their rule over time.…”

“…The method is modified to take into account two independent policymakers, which can have different loss functions, as in Oudiz and Sachs (1984) and Capoen and Villa (1997). We use Söderlind's notations.…”