In this seminar David Vines will provide an overview of his recent paper Macroeconomic Policy Cooperation and the Global Non-System: An Analytical Overview. In this paper Prof Vines examines, for a number of recent international policymaking regimes, whether international cooperation is necessary in the making of macroeconomic policy. It is possible, even although each country imposes externalities on other countries, that the polices made in separate countries lead to a global optimum, i.e. that the global Nash equilibrium is the same as the global cooperative equilibrium. In this case international macroeconomic cooperation is not necessary. Some, e.g. Corden, have described such a regime as a global ‘non-system’. Or it may be that there is an irreducible conflict between the policy objectives of different countries. In this case international macroeconomic cooperation can be helpful. According to Prof Vines, which of these two cases is relevant depends both on the economic structure in existence, and on constraints on the way in which macroeconomic policies are made within countries.

David Vines is a Professor of Economics and a Fellow of Balliol College, at Oxford University, and a Research Fellow of the Centre for Economic Policy Research. David’s research has been on international macroeconomics and on global governance. He is currently working on international cooperation on macroeconomic policies, designed to ensure that the recovery from the global financial crisis is sustained.

The CAMA Macroeconomics Brown Bag Seminars offer CAMA speakers, in particular PhD students, an opportunity to present their work in progress in front of their peers, and reputable visitors to showcase their work.