Franklin

Model Uncertainty. Learning, and the Gains from Coordination [electronic resource]

Author/Creator:
International Monetary Fund
Publication:
Washington, D.C. : International Monetary Fund, 1988.
Format/Description:
Government document
Book
1 online resource (38 p.)
Series:
IMF eLibrary
IMF Working Papers
Status/Location:
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Local subjects:
Adaptive expectations. (search)
Aggregate demand. (search)
Demand for money. (search)
Foreign currency. (search)
Gdp deflator. (search)
Inflation. (search)
Inflation equation. (search)
Inflation rate. (search)
International monetary policy. (search)
Monetary base. (search)
Monetary fund. (search)
Monetary policies. (search)
Monetary policy. (search)
Money balances. (search)
Money demand. (search)
Money stocks. (search)
Money supplies. (search)
Money supply. (search)
National monetary policies. (search)
Price level. (search)
Rate of inflation. (search)
Rates of inflation. (search)
Rational expectations. (search)
Real money. (search)
Terms of trade. (search)
Grenada. (search)
Switzerland. (search)
United Kingdom. (search)
United States. (search)
Summary:
The paper considers gains from international economic policy coordination when there is uncertainty concerning the functioning of the world economy, but also learning about the “true” model on the part of policymakers. The paper reports estimates of plausible alternative versions of a standard, two-country model. Activist policy (either coordinated or uncoordinated) may produce large welfare losses in the absence of learning, if policymakers believe in the wrong model; hence exogenous money targets and freely flexible exchange rates may be best. However, model learning (from observations on macroeconomic variables) causes coordinated policies to dominate activist uncoordinated policies or exogenous money targets.
Notes:
Description based on print version record.
Contributor:
International Monetary Fund
Other format:
Print Version:
ISBN:
1451943148:
9781451943146
ISSN:
1018-5941
Publisher Number:
10.5089/9781451943146.001
Access Restriction:
Restricted for use by site license.