José Ramón García Menéndez
Docto en Economía y Profesor Titular Política Económica
UNIVERSIDAD DE SANTIAGO DE COMPOSTELA
Facultad CC. Económicas
Universidad de Santiago de Compostela
A Coruña – ESPAÑA
Tel. –34 981 582500 – Ext. 11.602
Telfax. – 34 981528042
INTERNATIONAL COORDINATION OFECONOMIC POLITICS THROUGH THE GAME THEORY
During the last 30 years, the study of the international coordination of macroeconomic policies has become one of the most interesting and growing areas of macroeconomics. As a result, there are many written works on this topic.
The purpose of this work is to review the most relevant literature about the coordination of economic policieswhich applies a game theory approach. First, we analyze the causes of the development of the policies coordination as a research field in macroeconomics, which are related with the recent international economic interdependence and with the decision made by different countries to adopt cooperative strategies. We also analyze the different forms or coordination levels and the possible obstacles forthe international economic coordination. Second, we explain the historical origin and evolution of the international economic coordination as well as different examples of international organizations arising from the economic coordination. Third, we analyze the theoretical basis of the international coordination of macroeconomic policies, focusing on the game theory approach.
KEY WORDS: GAMETHEORY, MACROECONOMICS POLICIES, ECONOMIC COORDINATION
JEL: C15, E61
INTERNATIONAL COORDINATION OF ECONOMIC POLITICS THROUGH THE GAME THEORY
1. PREVIOUS CONSIDERATIONS
The extraordinary growth of the policies coordination as research field inside the macroeconomics is due, to a great extent, to two facts: first, the growing international economic interdependence and second, theimportance achieved by the international coordination in the economic policies since the mid-80s.
The growth of the international economic interdependence can be observed by analyzing the evolution of the commercial flow and of the financial markets. Since mid XX, the international commercial flows have experienced growing rates higher than the increase in the level of global activity which resultsin an increased presence of the national economies. In the field of the financial markets, the fast creation of new institutions and instruments has allowed a significant increase in the international capital mobility which caused the generation of a true international financial system that surpasses the international markets (MAYCAS TARASCÓN, 1988).
Among the causes which allow us toexplain the strength of the international economic interdependence we can highlight the following ones:
- The reduction of the differences between comparative costs, increasing the possibilities to make replacements in the production.
- The greater integration of markets as a result of a better understanding of the production possibilities and purchase in foreign markets.
- The reductionof official barriers to trade as a result of the economic liberation policies promoted by the IMF or the GATT first and then by the WTO.
- The higher familiarity with the functioning of foreign financial markets, arising from the development of the international financial system we mentioned before.
- The reduction of the barriers to the capital movements, which is a consequence of boththe international economic liberation policies promoted by organizations like the IMF and the staging of a new international financial system.
Therefore, the causes of the greater economic interdependence are related to two changes that take place in the international economic scenario: the development of the media and transport and the disclosure of the disclosure and management techniques....