International Policy Cooperation and Model Uncertainty

Holtham, Gerald; Hallett, Andrew Hughes

doi:10.1007/978-1-349-18916-8_5

Cited by 27 publications

(13 citation statements)

References 8 publications

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“…It follows from (13) However, as is implied by (17), (18), (21) and (22), due to the ex ante concern about policy robustness the governments behave and make the policy calculation as they do in an otherwise identical game 10 where no uncertainty exists and the home and foreign welfare are As a matter of reference, we shall call this the game of observational equivalence. (23) and (24) as compared with (25) and (26).…”

Section: Nature and Non-convexitymentioning

confidence: 99%

“…Indeed, there are cases when unilateralism is superior for both carbon mitigation and economic loss minimization. This paper draws on the empirical literature on macroeconomic policy coordination such as Frankel and Rockett (1988) and Holtham and Hughes-Hallett (1987) which is based on model correctness and the desirability of policy coordination. However rather than macroeconomic policy, this paper applied these ideas to the coordination of climate change policy.…”

Section: Introductionmentioning

confidence: 99%

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Uncertainty and International Climate Change Negotiations

Cai

McKibbin

2013

SSRN Journal

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Section: Nature and Non-convexitymentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Uncertainty and International Climate Change Negotiations

Cai

McKibbin

2013

SSRN Journal

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“…Though this assumption appears realistic, it should be noted that whenever the monetary and fiscal authorities use different models the outcomes obtained from cooperation may, in some cases, be worse than those derived from noncooperation (Frankel, 1987; see also Frankel and Rockett, 1986;Holtham and Hughes Hallett, 1987). such as consistent conjectural variations (CCV) solutions-of computational tractability in continuous time (see Basar, 1986).…”

Section: The Problem Of Decentralized Decisionsmentioning

confidence: 99%

Fiscal and monetary policy co‐ordination: A differential game approach

Petit

1989

J of Applied Econometrics

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In this paper the interaction between the Treasury and the central bank is examined in the case of both cooperative and non-cooperative behaviour. Differential games are used in the framework of a continuous-time econometric model of the Italian economy. The Nash and the Stackelberg noncooperative equilibrium solutions are computed, and the case for cooperation is analysed by considering the Nash and the Kalai-Smorodinsky bargaining models. It is shown that, in the Italian case, the government has a stronger bargaining position than the central bank. A comparison is then made between the different solutions to show that the drawbacks that emerge from non-cooperation are not simply those depending on the players' payoffs. Other features are in fact considered which constitute a further argument for policy co-ordination. 'See Balducci (1985), Neck (1985) and Dockner and Neck (1986). See also Currie and Levine (1985) and Miller and Salmon (1985) for applications of differential games to a problem of international policy coordination.

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“…In both strands uncertainty, including model uncertainty, has been a problem highlighted in some previous work. (see, in particular, Holtham and Hughes-Hallett (1987) and Bryant (1995)). One response to the issue of uncertainty has been the use of stochastic simulations to calculate explicit model prediction standard errors, in order to place confidence intervals around previous deterministic solutions (see, e.g., ).…”

Section: Introductionmentioning

confidence: 98%