The Theory of Economic Policy in a Strategic Context
Cambridge University Press
Edition: Reprint, 8/30/2018
EAN 9781108468824, ISBN10: 1108468829
Paperback, 366 pages, 27.9 x 21.6 x 2.1 cm
Language: English
In developing a new and highly innovative theory of economic policy, this book deals with conflicts between strategic actions by public and private agents. It builds on the Lucas critique but also applies the tools introduced by Tinbergen and Theil to dynamic policy games, and from there derives a new theory of economic policy. Its main propositions describe such properties in the models currently used for policy-making as neutrality and equilibrium existence, uniqueness, and multiplicity. These properties are key to understanding the impact of concepts such as rational expectations, time inconsistency, communication and the use of policy announcements. As the numerous examples show, they are useful both for model building and for devising optimal institutions. The Theory of Economic Policy in a Strategic Context is an essential but accessible tool for economic researchers involved in policy questions.
List of figures
List of tables
Preface
Common symbols
1. An overview
the realm of economic policy
Part I. The Classical Theory of Economic Policy
2. Statics
3. Dynamics
Part II. From the Classical to the New Theory of Economic Policy
4. The Lucas critique
5. Policy games
an introduction
Part III. The New Theory of Economic Policy
Statics
6. A theory of strategic conflict
foundations
7. From individual players to system controllability
8. Conflicts and coordination among groups
9. Announcements as a coordination mechanism
Part IV. The New Theory of Economic Policy
Dynamics
10. Controllability in a strategic dynamic setting
11. Dynamic policy games with rational expectations
12. Credibility, dynamic controllability and rational expectations
13. Expectations and target coordination
institutional aspects
14. A summary and round-up of conclusions
References.