Sustainability of the Friedman rule in an international monetary policy game Academic Article

abstract

• This article develops a two-country monetary economy model in order to analyze the international monetary policy game between governments and the domestic monetary policy game between each government and its private sector. We prove that if governments can commit to their own private sectors, the cooperative equilibrium of the game between governments is for them to follow the Friedman rule. When governments lack such ability to commit, we find that the Friedman rule is more likely to be sustained in our open-economy model than in the closed-economy model of Ireland. (JEL E31, E52, E61) 2007 Western Economic Association International.

authors

• Jansen, Dennis

published proceedings

• ECONOMIC INQUIRY

author list (cited authors)

• Jansen, D. W., Liu, L., & Weng, M.

citation count

• 1

complete list of authors

• Jansen, Dennis W||Liu, Liqun||Weng, Ming-Jang

publication date

• July 2007

publisher

• Wiley  Publisher

published in

• ECONOMIC INQUIRY  Journal

keywords

• 38 Economics
• 3802 Econometrics
• 3803 Economic Theory

Digital Object Identifier (DOI)

• 10.1111/j.1465-7295.2007.00043.x

start page

• 470

end page

• 486

volume

• 45

issue

• 3

URL

• http://dx.doi.org/10.1111/j.1465-7295.2007.00043.x