Cover; Abstract; I. INTRODUCTION; II. WHY DID INTEREST IN DOMESTIC POLICY COOPERATION WANE?; III. MACROECONOMIC POLICY COOPERATION IN AN AGE OF INDEPENDENT CENTRAL BANKS; IV. FINANCIAL POLICY COORDINATION IN AN AGE OF FINANCIAL INSTABILITY; V. STRUCTURAL POLICY COORDINATION IN AN AGE OF DIMINISHED EXPECTATIONS; VI. THE GRAND BARGAIN; References
Summary
"This paper examines domestic policy cooperation, a curiously neglected issue. Both international and domestic cooperation were live issues in the 1970s when the IS/LM model predicted very different external outcomes from monetary and fiscal policies. Interest in domestic policy cooperation has since fallen on hard intellectual times - with knock-ons to international cooperation - as macroeconomic policy roles became highly compartmentalized. The author first discusses the intellectual and policy making undercurrents behind this neglect, and explain why they are less relevant after the global crisis. This is followed by a discussion of: macroeconomic policy cooperation in a world of more fiscal activism; coordination across financial agencies and with macroeconomic policies; and how structural policies fit into this. The paper concludes with a proposal for a 'grand bargain' across principle players to create a 'new domestic cooperation.'"--Abstract
