تعاملات پولی و مالی در اقتصاد باز

A two-country sticky-price model is used to analyse the interactions between fiscal and monetary policy. The role of an `activist' fiscal policy as a stabilisation tool is considered and a measure of the welfare gains from international fiscal policy cooperation is derived. It is found that welfare gains from fiscal cooperation do exist provided monetary policy is set cooperatively. There are also welfare gains from fiscal policy cooperation in a monetary union. However, it is found that a `non-activist' fiscal policy can be better than non-cooperative fiscal policy when the international correlation of shocks is strongly negative. And non-cooperative fiscal policy can be better than cooperative fiscal policy if monetary policy is not set cooperatively.

This paper uses a two-country model to analyse the interactions between fiscal and monetary policy when these policies are used as tools of macroeconomic stabilisation. There are two main questions of interest. First is the extent to which there is a role for fiscal policy as a stabilisation tool and the extent to which this interacts with monetary policy. Second is the scope for welfare gains from international fiscal policy cooperation and the interaction between these gains and the monetary policy regime. The formation of a monetary union in Europe and the debate about the `Stability and Growth Pact' make the analysis of fiscal and monetary interactions an especially interesting topic. It is often argued that the loss of monetary policy flexibility due to the merger of currencies increases the potential role of fiscal policy as a stabilisation tool and increases the need for fiscal policy cooperation within Europe. The issue of fiscal and monetary interaction also arises at the global level where concern about large fiscal and current account imbalances has added to the debate about policy coordination between the major world economies. The appropriate role for monetary policy in a stochastic world has been a major topic of research in the last few years. Much attention has been focused on the welfare implications of monetary policy regimes, especially in cases where there is some degree of nominal rigidity. These welfare effects of monetary policy have also been an important topic in open economy research. In this context there has been extensive analysis of the role and scope for international monetary cooperation. The present paper is an attempt to build on this literature by incorporating a role for fiscal policy.1 There is obviously also an extensive existing literature which seeks to analyse the interaction between fiscal and monetary policy (see Chari and Kehoe, 1999). One issue which has received considerable attention is the way in which the government's budget constraint creates links between fiscal and monetary policy.2 This issue is not addressed in this paper. Another focus of the existing literature is the methodological parallels between the analysis of optimal monetary policy and optimal taxation. The question addressed in this literature is the extent to which monetary policy can be viewed as a distortionary policy instrument which can be used to offset other structural or stochastic distortions. Viewed in another way this `public finance' approach is beginning to tackle the interaction between monetary and fiscal policy as instruments of macroeconomic stabilisation (e.g. Correia et al., 2001). One possible way to tackle the questions analysed in the current paper would be to extend the `public finance' approach to fiscal/monetary interactions to a two-country world and then to study the so-called `Ramsey problem' from the perspective of individual national or world policymakers. However, we do not take this approach. Instead we adopt the methodology which has been used extensively in the recent open economic literature (e.g. Obstfeld and Rogoff, 2002; Devereux and Engel, 2000; Corsetti and Pesenti, 2001b). This involves deriving welfare functions (based on aggregate utility) which show the explicit dependence of welfare on policy instruments. It is then possible to use direct calculation to derive equilibria for a wide range of cooperative and non-cooperative regimes. In adopting this methodology we are following Beetsma and Jensen (2002) who analyse the interactions between fiscal and monetary policy in a monetary union using a microfounded model which incorporates fiscal policy in the form of government expenditure. They analyse optimal (cooperative) fiscal policy and compare the performance of a number of simple fiscal rules. We use a version of the Beetsma and Jensen model which is simplified in some respects and extended in others. We focus on a static version of the model with preset prices. This allows us to derive explicit analytical expressions for national welfare levels. We extend the Beetsma and Jensen model by allowing the international elasticity of substitution between goods to differ from unity. This latter modification creates the possibility for gains from policy cooperation. The former modification makes it possible to analyse these gains explicitly. We use this framework to analyse the interaction between monetary and fiscal policy. In particular we analyse the role of activist fiscal policy and the scope for welfare gains from international fiscal policy cooperation. The model is presented in Section 2 and the links between policy variables and welfare are discussed in Section 3. The analysis of fiscal policy begins in Section 4 where a flexible-price version of the model is considered. In this case monetary policy is neutral so it is possible to study in isolation the implications of activist fiscal policy and the potential welfare gains from fiscal policy cooperation. It is found that there is a role for activist fiscal policy and that there are welfare gains from cooperation. The welfare benefits of activist fiscal policy arise because labour-supply shocks alter the natural level of output and thus require parallel movements in aggregate demand. The welfare gains to fiscal policy cooperation arise because imperfectly correlated labour-supply shocks and movements in the terms of trade imply that national policymakers have conflicting objectives for world aggregate demand. Indeed it is found that, when the cross-country correlation of shocks is sufficiently negative, the conflicting objectives of Nash policymakers can be so strong that non-activist fiscal policy may yield higher welfare than activist fiscal policy. Section 5 reconsiders these issues in a fixed-price version of the model. Firstly it is shown that optimal cooperative monetary policy reproduces the flexible-price equilibrium regardless of the fiscal policy regime. It therefore follows that the conclusions reached in the flexible-price case carry over to the fixed-price case provided monetary policy is set cooperatively. There are therefore welfare gains to activist fiscal policy and there are welfare gains to fiscal policy cooperation provided monetary authorities are cooperating. The welfare gains from fiscal cooperation are, however, sensitive to the behaviour of monetary authorities. If monetary authorities act as Nash players it is found that fiscal policy cooperation can reduce welfare. There is thus a second-best quality to non-cooperative fiscal policy. The distortions created by non-cooperative fiscal policy partly offset the distortions created by non-cooperative monetary policy. It remains true, however, that monetary cooperation yields non-trivial welfare gains even when fiscal policy is not set cooperatively. Section 6 considers the role of fiscal policy in a monetary union. Monetary policy in a monetary union cannot replicate the flexible-price equilibrium but many of the results regarding fiscal policy continue to apply to the monetary union case. It is again found that activist fiscal policy yields welfare gains and there are welfare gains to fiscal policy cooperation. But it is also true that non-activist fiscal policy can yield higher welfare than non-cooperative fiscal policy when the cross-country correlation of shocks is strongly negative.

This paper has analysed the interaction between fiscal and monetary policy in a two-country sticky-price model. It is found that a world policymaker seeking to maximise world aggregate utility would use both fiscal and monetary policy as tools of stabilisation policy. There is therefore a stabilisation role for fiscal policy in addition to monetary policy. It is also found that, in general, a regime of full policy cooperation yields higher welfare than non-cooperative policy (where either fiscal or monetary policy is set at a national level by policymakers who act as Nash players). There are therefore welfare gains to both monetary and fiscal policy cooperation. It does not follow, however, that in all circumstances cooperative fiscal policy is better than non-cooperative fiscal policy. For instance, it is found that, when monetary authorities act as Nash players, a Nash equilibrium in fiscal policy yields higher welfare than cooperative fiscal policy. It also does not follow that activist fiscal policy is better than non-activist fiscal policy. It is generally found that, regardless of the monetary policy regime, non-activist fiscal policy yields higher welfare than activist fiscal policy if fiscal authorities act as Nash players and the cross-country correlation of shocks is strongly negative.