Policy games, policy neutrality and Tinbergen controllability under rational expectations

Nicola, Acocella; Giovanni Di Bartolomeo,; Hughes Hallett, A.

doi:10.1016/j.jmacro.2009.07.002

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This paper shows the relationship between static controllability (well-known as Tinbergen's golden rule) and the existence and other properties of the Nash equilibrium in a dynamic setting augmented with rational expectations (RE) for future behavior. We derive new theorems which state sufficient conditions for the neutrality of economic policy, and necessary conditions for the existence of equilibrium in strategic games. We show these conditions are not affected by the assumption of RE. We are also able to show how to determine who will dominate in these equilibria, and who will find their policies to be ineffective, without having to solve out for all the possible outcomes explicitly. © 2009 Elsevier Inc. All rights reserved.

Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11573/15851

Titolo:	Policy games, policy neutrality and Tinbergen controllability under rational expectations
Autori interni:	ACOCELLA, Nicola
Data di pubblicazione:	2010
Rivista:	JOURNAL OF MACROECONOMICS
Abstract:	This paper shows the relationship between static controllability (well-known as Tinbergen's golden rule) and the existence and other properties of the Nash equilibrium in a dynamic setting augmented with rational expectations (RE) for future behavior. We derive new theorems which state sufficient conditions for the neutrality of economic policy, and necessary conditions for the existence of equilibrium in strategic games. We show these conditions are not affected by the assumption of RE. We are also able to show how to determine who will dominate in these equilibria, and who will find their policies to be ineffective, without having to solve out for all the possible outcomes explicitly. © 2009 Elsevier Inc. All rights reserved.
Handle:	http://hdl.handle.net/11573/15851
Appare nelle tipologie:	01.a Pubblicazione su Rivista

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