| Budget Amount *help |
¥2,100,000 (Direct Cost: ¥2,100,000)
Fiscal Year 1998: ¥400,000 (Direct Cost: ¥400,000)
Fiscal Year 1997: ¥800,000 (Direct Cost: ¥800,000)
Fiscal Year 1996: ¥900,000 (Direct Cost: ¥900,000)
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| Research Abstract |
We have two purposes in this paper. One of them is to construct a model of international currency under hegemonic system and consider credibility of hegemon's monetary policy. Regarding this purpose we have three results. First, the credibility of hegemon's foreign monetary policy depends on policy targets' discrepancy of an exchange rate between outward and inward-looking hegemons, hegemon's policy preference and biased depreciation of international currency. Second, if policy targets' discrepancy of an exchange rate between outward and inward-looking hegemons is enough large like ages of hegemonic establishment, the announced foreign monetary policy by the hegemon will be credible. The hegemon commits a foreign monetary policy and non-hegemons believe it to anticipate an exchange rate. Third, if policy targets' discrepancy of an exchange rate between them is enough small like hegemonic building and unsettled ages, the announced foreign monetary policy by the hegemon will not be credible.
The other purpose is to analyze how fluctuations of an international currency are affected by a hegemon's policy management. We have three results. First, any type of hegemon, including both inward and outward-looking ones, first guides an international currency higher than its true preference, and later let it fall based on its true preference. Second, by disclosing the hegemon's private information about its own preference, while the outward-looking hegemon has its expected payoff increased, the inward-looking hegemon has it decreased. Third, while the outward-looking hegemon has an incentive to promote international cooperation involving disclosure of private information about its own preference, the inward-looking hegemon does not.
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