ABSTRACT
In the preceding sections we have been dealing with a single country, which has adopted a New Keynesian strategy in a large world in which the other countries are operating a miscellany of other poliCies with their price levels, rates of interest, total levels of demand, etc., all given as an unalterable exogenous variable to the decision-makers in the single country under examination. The question arises whether and, if so, how best the system could be successfully generalised if every country in the freeenterprise world adopted a successful domestic New Keynesian policy, each keeping its own domestically produced money incomes on a predetermined steady growth path by tax policy and maintaining full employment by appropriate adjustments of wage rates. How could the countries concerned best co-operate in monetary and foreign-exchangerate policies?
