Coalition formation in international monetary policy games

• 成果类型: Article
• 署名作者: Kohler, M
• 署名单位: Bank of England
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/S0022-1996(01)00128-3
• 发表日期: 2002
• 页码: 371-385
• 关键词: currency unions; International policy coordination; free-riding; coalition formation

摘要

This paper analyses coalition formation in monetary policy coordination games between n countries. We show that some but not all countries may join if the decision to be a member of the coalition is incentive-compatible for the individual country. Positive spillovers of the coalition formation process and the resulting free-rider problem limit the stable coalition size: since the coalition members are bound by the union's discipline, an outsider can successfully export inflation without fearing that the insiders will try to do the same. These 'gains from staying out' arise even in the case of symmetric shocks. (C) 2002 Elsevier Science B.V. All rights reserved.