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Optimal stabilisation policies in interdependent economies: a game theoretic approach
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Turner, Paul (1985) Optimal stabilisation policies in interdependent economies: a game theoretic approach. PhD thesis, University of Warwick.
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Official URL: http://webcat.warwick.ac.uk/record=b1444544~S15
Abstract
This thesis examines the inefficiencies which arise from decentralised policy making in an interdependent world economy. Policy making is modelled as a non-cooperative, non-zero sum game between economies.
Each economy is assumed to have a loss function defined on relevant macroeconomic variables. The constraints facing any particular economy are determined by the joint action of all the economies. Conventional Nash and Stackelberg solution concepts are examined for simple comparative static models. These solution concepts are then extended to models in which the constraint set has a dynamic structure. It is demonstrated that even when countries can agree on ultimate targets policy will still be inefficient because of sub- optimal choices of convergent paths to steady-state. A simple macro- economic model of an interdependent world economy is used to demonstrate this analytically. This is followed by numerical simulations of a more general model. Although the inefficiency discussed above is clearly present it appears to be numerically small suggesting that some ultimate conflict of interests is necessary for decentralised policy to have large welfare effects.
| Item Type: | Thesis (PhD) | ||||
|---|---|---|---|---|---|
| Subjects: | H Social Sciences > HB Economic Theory | ||||
| Library of Congress Subject Headings (LCSH): | Economic policy -- Mathematical models, International economic relations -- Mathematical models, Economic stabilization, Monetary policy, Statics and dynamics (Social sciences) | ||||
| Official Date: | May 1985 | ||||
| Dates: |
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| Institution: | University of Warwick | ||||
| Theses Department: | Department of Economics | ||||
| Thesis Type: | PhD | ||||
| Publication Status: | Unpublished | ||||
| Supervisor(s)/Advisor: | Miller, Marcus,1941- ; Salmon, Mark | ||||
| Sponsors: | Economic and Social Research Council (Great Britain) | ||||
| Extent: | iv, 173 leaves : illustrations | ||||
| Language: | eng |
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