2017年-BIS国际清算银行_Currency_wars_or_efficient_spillovers_69页_721kb

Summary of "Currency Wars or Efficient Spillovers?" by Anton Korinek

Core Content

This paper, titled "Currency Wars or Efficient Spillovers?" by Anton Korinek, presents a general theory of international policy cooperation in an open economy setting. It challenges the conventional intuition that international spillovers always necessitate cooperation and instead proposes a framework where spillovers may be efficient and thus not require intervention.

Main Viewpoints

• International Spillovers and Cooperation: National economic policies have significant international spillover effects, which often lead to calls for cooperation. However, the paper argues that these spillovers are not inherently inefficient and may be Pareto efficient if certain conditions are met.

• First Welfare Theorem for Open Economies: Korinek introduces a first welfare theorem for open economies, defining an efficient benchmark and outlining the conditions that must be violated to create inefficiency and the need for cooperation.

• Conditions for Efficiency: The paper identifies three key conditions under which international spillovers are efficient:

  1. Policymakers act competitively in the international market.
  2. Policymakers have sufficient external policy instruments.
  3. International markets are free of imperfections.

• Monopolistic Behavior and Policy Instruments: When these conditions are not met, international policy cooperation becomes necessary. Specifically, if policymakers have imperfect external instruments, they may not be able to optimally target external transactions, which can lead to inefficiencies.

• Market Imperfections and Global Cooperation: If international markets are imperfect (e.g., due to price stickiness, financial constraints, or missing markets), global cooperation is generally required to improve the functioning of the price mechanism and address these inefficiencies.

Key Information

Efficient Benchmark and Spillovers

• The paper defines an efficient benchmark for international policy cooperation using a reduced-form welfare function that depends only on a country’s international transactions.
• In a well-functioning global market, spillovers from national policies are Pareto efficient because they act as pecuniary externalities mediated through world market prices.

Policy Cooperation Framework

• The framework assumes that policymakers optimize domestic welfare while acting with "benign neglect" towards international prices.
• If the three efficiency conditions are met, then any attempt at further cooperation is futile, as the uncooperative equilibrium is already efficient.
• If the conditions are violated, policy cooperation can lead to Pareto improvements.

Examples of Spillovers

• Real Spillovers: An endowment shock in one period leads to changes in net imports and capital flows, affecting world interest rates and the welfare of other countries.
• Current Account Intervention: When policymakers have external instruments (e.g., taxes on imports or subsidies on exports), they can influence the spillovers of their policies. The paper provides an example of how optimal tax instruments can be used to internalize externalities.
• Monetary Policy: The paper shows that in a two-period model with traded and non-traded goods, monetary policy adjustments are driven by shocks and result in efficient spillovers.
• Fiscal Shocks: Fiscal shocks can also lead to international spillovers, which may require cooperation if they result in inefficiencies.
• Macroprudential Policy: When external policy instruments are missing, macroprudential policies may be necessary to address spillovers, as seen in the example of Basel III reciprocity clauses.
• Exchange Rate Stabilization: Exchange rate management can lead to spillovers, which may be inefficient if international markets are imperfect.

Implications for Policy Cooperation

• The paper emphasizes that whether cooperation is needed depends on the environment, not the specific policy.
• Monopolistic behavior (i.e., when policymakers act with market power) can be corrected through cooperation.
• Imperfect external instruments and international market imperfections both justify the need for policy cooperation.
• The paper provides general guidelines for when and how policy cooperation can improve welfare.

Structure and Contributions

• The paper is structured into an introduction, several examples of spillovers, a general framework, and a detailed analysis of the conditions for cooperation.
• Key Contributions:
  1. A first welfare theorem for open economies that defines an efficient benchmark.
  2. A framework that relaxes the standard assumptions of the first welfare theorem, showing how spillovers can be efficient or inefficient depending on the environment.
  3. An analysis of the role of policy instruments and market imperfections in shaping the need for international cooperation.
  4. Illustration of the theoretical implications in practical and analytic examples.

Conclusion

• International spillovers are not always inefficient and do not always call for cooperation.
• The need for cooperation arises when the three conditions of the first welfare theorem are violated.
• The paper provides a theoretical foundation for understanding when international policy cooperation is beneficial and when it is not.

Mathematical and Analytical Tools

• The paper uses Arrow-Debreu-style general equilibrium models to formalize the relationship between domestic and international allocations.
• Reduced-form welfare functions are used to analyze how changes in international transactions affect domestic welfare.
• Shadow prices and optimality conditions are derived for both private agents and policymakers to understand how they respond to shocks and spillovers.

References and Further Reading

• The paper draws on the Tinbergen-Theil tradition of policy instruments and targets.
• It references real-world examples such as the WTO, Basel III, and currency wars to illustrate its theoretical points.
• The online appendices provide further derivations and examples, including a simple two-period model to illustrate the main efficiency result.

Key Takeaways

• Spillovers are efficient if policymakers act competitively, have sufficient instruments, and markets are perfect.
• Policy cooperation is only beneficial when these conditions are not met.
• The paper challenges the conventional view that all international spillovers require cooperation, emphasizing the importance of the policy environment.
• It provides analytical tools and examples to help policymakers and economists assess the need for international cooperation.