Optimal Central Bank Monetary Policy in an Open Economy－A Two-Country Game Theory Analysis
Date Issued
2014
Date
2014
Author(s)
Lee, Chi-Hua
Abstract
This paper will discuss that under an open economic system, the decision making behind the Quantitative Easing Monetary Policy (QE) adopted by the central banks at different economies. First, the paper discussed that under a closed economic system, the central bank will take the following measures: inflation, unemployment and productivity as a consideration for adopting an optimal QE Policy as the economy transits to a free market economy. Second, the paper discussed that under an open economic system, the central bank will take inflation, unemployment, productivity and the degree of openness to trade as measures, and by using the Game Theory, the ideal QE policy that needs to be adopted by the central banks at different economies. The paper concluded that under Nash equilibrium, if Exogenous Variable of two economies remains the same, both central banks will adopt the same approach to QE Policy to stimulate the demand of domestic economy and prevent from the effect of the other economies.
Subjects
開放經濟
量化寬鬆貨幣政策
央行目標
賽局
SDGs
Type
thesis
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ntu-103-P00341025-1.pdf
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