Izvorni znanstveni članak
https://doi.org/10.1080/1331677X.2022.2142258
The central bank or the government – who really dictates the terms of the policy-mix cooperation in economies with an independent monetary policy?
Joanna Stawska
Maciej Malaczewski
Paulina Malaczewska
Ewa Stawasz- Grabowska
Sažetak
The objective of this paper is to consider the cooperative game
between the central bank and the government in the case of a
non-euro country in the European Union or another country in
the world that conducts an independent monetary policy and
where statutory deficit restrictions were imposed on its budget.
The study takes into account two independent players – the government
and the central bank – that make autonomous decisions
and are responsible for fiscal and monetary policy, respectively.
Our mathematical policy mix model is based on the assumption
that there exists some level of coordination between these policies.
The article aims to analyse how the level of cooperation influences
the behaviour of decision-makers in a specific policy mix
model. As a result, the government taking into account the central
bank’s goals has no impact on the equilibrium of the budget deficit
and interest rates. The conclusion about the central bank’s
privileged position emerged as a mathematical consequence of
the proposed model. This is confirmed by another case where the
government does not consider the central bank’s target in its decisions;
then, it does not prevent the monetary authorities from
influencing the Nash equilibrium level of either decision variable
Ključne riječi
Monetary and fiscal policies (policy mix); game theory; Nash equilibrium; cooperative game
Hrčak ID:
306721
URI
Datum izdavanja:
30.4.2023.
Posjeta: 411 *