Policy Response between Monetary Policy and Fiscal Policy A Case of Small-Open Economy Model

Authors

  • Ponlapat Rerkwandee Service Project Manager, Huawei Technologies (Thailand), 31 Floor, CRC Tower, All seasons Place 87/2 Wireless Road, Lumpini, Pathumwan, Bangkok 10330 Thailand.

Keywords:

Strategic Policy, Monetary Policy, Fiscal Policy, Game Theory

Abstract

Strategic action between exchange rate and fiscal status has been
longtime debated between fiscal policymaker and monetary policymaker. Using a game theory approach of Stackelberg Model and Nash Equilibrium Model, government spending and interest rate in the Stackelberg model
will be higher than those under Nash Equilibrium Model. However, if im-
perfect capital mobility is allowed, interest rate and government spending will be higher than the case under perfect capital mobility.

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Published

2012-07-01

Issue

Vol. 6 No. 2 (2012): NIDA Economic Review Journal

Section

Articles

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