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EXERCISE 14.10COORDINATING A STIMULUS Assume the world is made up of just two countries, or blocs, called North and South. The world is in a
EXERCISE 14.10COORDINATING A STIMULUS
Assume the world is made up of just two countries, or blocs, called North and South. The world is in a deep recession. The situation can be described using thecoordination game used for investment in Unit 13. Here the two strategies are Stimulus and No stimulus.
Explain in words how the coordination game reflects the problems faced by policymakers in the two countries that arise because of their interdependence.
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