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Analysis of strategies in a monetary-fiscal game. The case of Poland
Subtitle:Raport Badawczy = Research Report ; RB/54/2016
Creator:Kruś, Lech ; Woroniecka-Leciejewicz, Irena
Publisher:Instytut Badań Systemowych. Polska Akademia Nauk ; Systems Research Institute. Polish Academy of Sciences
Place of publishing: Date issued/created: Description:[1],164-183 pages ; 21 cm ; Bibliography p. 182-183
Abstract:A monetary-fiscal game describing the interactions of the fiscal and monetary authorities is formulated and analyzed. A macroeconomic model for the Polish economy has been formulated on the basis of the concept of New Neoclassical Synthesis and respectively extended so as to accommodate the effects of fiscal policy. Several variants of the model have been estimated using statistical data for the Polish economy. It is assumed in the game that each party (monetary and fiscal) tries to achieve its own goal: the fiscal authority – the assumed GDP growth, and the monetary authority – an inflation level. The best response strategies of the authorities and the Nash equilibria are calculated and analyzed in two cases, namely when the decisions are made simultaneously and sequentially. The simulation results obtained indicate that when the authorities try to achieve independently their goals, in a general case the Nash equilibrium is not Pareto optimal. The best response strategies may lead to conflict escalation and to results that are not beneficial for both parties.
Relation:Raport Badawczy = Research Report
Resource type: Detailed Resource Type: Source: Language: Language of abstract: Rights:Creative Commons Attribution BY 4.0 license
Terms of use:Copyright-protected material. [CC BY 4.0] May be used within the scope specified in Creative Commons Attribution BY 4.0 license, full text available at: ; -
Digitizing institution:Systems Research Institute of the Polish Academy of Sciences
Original in:Library of Systems Research Institute PAS
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