Game Analysis of China Central Banks Adjustment of Interest Rates
There is an agreed-upon in modern economics that a monetary policy can be determined by either rules or discretion, where the latter tends to be more flexible but its repetitive change increases the uncertainty of the policy delay, which will possibly turn itself into one of the roots of economy instability 1 .While public expectations have had growing impact on the economy, how to lead public expectations and improve the effectiveness of its monetary policy are big challenges for the central bank. This paper addresses that if there is no reliable monetary policy when the central bank is in the game with the public, the prisoners dilemma will arise, but if the central bank can restrict its action space by making predictable policies, that will help to internalize future policies external effect, realize the dynamic consistency of the policy effect and achieve a better economic equilibrium.
Interest rates adjustment Game Rules Discretion
Yu Shang Hui Wang
School of Management, China University of Mining &Technology (Beijing), Beijing, P.R.China, 100083 Business School Business College of Beijing Union University, Beijing, P.R.China, 100025
国际会议
北京
英文
704-708
2009-07-24（万方平台首次上网日期，不代表论文的发表时间）