Autori
Di Bartolomeo, Giovanni
Di Gioacchino, Debora

Titolo
Fiscal-monetary policy coordination and debt management: a two-stage dynamic analysis
Periodico
Università degli Studi di Roma "La Sapienza" - Dipartimento di Economia Pubblica. Working Paper
Anno: 2004 - Volume: 6 - Fascicolo: 74 - Pagina iniziale: 1 - Pagina finale: 30

This paper studies the interaction between two autonomous policymakers, the central bank and the government, in managing public debt as the result of a two-stage game. In the first stage the institutional regime is established. This determines the equilibrium solution to be applied in the second stage, in which a differential game is played between the two policymakers. It is shown that, if the policymakers can communicate before the game is played, (multiple-equilibrium) coordination problems can be solved by using the concept of correlated equilibrium. Unlike Nash equilibrium, which only allows for individualistic and independent behaviour, a correlated equilibrium allows for the players’ behaviour to be coordinated and correlated.



SICI: 1974-2940(2004)6:74<1:FPCADM>2.0.ZU;2-G
Testo completo: http://dep.eco.uniroma1.it/docs/working_papers/WP74.pdf

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