Interactive behaviour between currency speculators, monetary and fiscal actors to minimise social loss: A game theoretic analysis
In this study, using game theory and the cooperative Stackelberg game model, the extent of social loss resulting from various interactive behaviours among monetary policymakers, fiscal policymakers, and currency speculators was assessed using economic parameters from Iran over ten years (20...
Salvato in:
| Autori principali: | , , |
|---|---|
| Natura: | Articolo |
| Lingua: | inglese |
| Pubblicazione: |
Faculty of Economics, Belgrade
2025-01-01
|
| Serie: | Ekonomski Anali |
| Soggetti: | |
| Accesso online: | https://doiserbia.nb.rs/img/doi/0013-3264/2025/0013-32642545133S.pdf |
| Tags: |
Aggiungi Tag
Nessun Tag, puoi essere il primo ad aggiungerne!!
|
| Riassunto: | In this study, using game theory and the cooperative Stackelberg game model,
the extent of social loss resulting from various interactive behaviours
among monetary policymakers, fiscal policymakers, and currency speculators
was assessed using economic parameters from Iran over ten years (2013-2022).
Three strategies for each player (government, central bank, and currency
market participants) were defined by their objectives, and through
optimisation, the reaction function for each player was determined. This
approach helped to identify the optimal interactive strategy among these
players to minimise social loss. The findings of this research indicate that
in a cooperative game between the government and the central bank, more
favourable outcomes are achieved when the government assumes the role of the
leader, as opposed to when the central bank leads. Furthermore, prioritising
the exchange rate gap over other economic variables improves outcomes when
the central bank acts as the leader. Specifically, these results suggest
that for fiscal policymakers, the importance of budget balance outweighs the
significance of the interest rate and exchange rate gaps. Under such
circumstances, the social loss during the examined period is lower than that
in other scenarios, signifying the optimality of this approach in terms of
minimising social loss. |
|---|---|
| ISSN: | 0013-3264 1820-7375 |