Skip to Main content Skip to Navigation
Preprints, Working Papers, ...

How to manage speculative shocks : intra-european vs. international monetary coordination

Abstract : The literature on currency crisis has generally not answered to the following question: which economic policies may reduce the contagion effects of a speculative shock? We use a dynamic Mundell-Fleming model extended to four countries and compute three time-consistent equilibria: a Nash equilibrium, and Nash-bargaining equilibria, first between the central banks of the G3 (a target zone equilibrium) and, second between European governments and the ECB. The best equilibrium for the Fed, European and Japanese policymakers is intra-European coordination. It induces a very expansionary fiscal policy in the USA whose government hence rejects it. Extensions to the case of a Stability Pact in European countries do not alter our results. Introducing a Fed less conservative than the ECB or the BoJ provokes a change in US preferences: both authorities give priority to the monetary equilibrium and the US government is no longer isolationist.
Document type :
Preprints, Working Papers, ...
Complete list of metadata
Contributor : Spire Sciences Po Institutional Repository Connect in order to contact the contributor
Submitted on : Tuesday, November 30, 2021 - 8:56:54 PM
Last modification on : Saturday, March 26, 2022 - 4:05:05 AM


Files produced by the author(s)


  • HAL Id : hal-03458449, version 1
  • SCIENCESPO : 2441/2978


Fabrice Capoen, Jérôme Creel, Pascal Cussy, Hélène Lenoble-Liaud. How to manage speculative shocks : intra-european vs. international monetary coordination. 2000. ⟨hal-03458449⟩



Record views


Files downloads