[abbazabba]

You also have to consider the weight each country carries in a global economy.

Everyone is tied to everyone else, and so there are bigger players and smaller players. If you are a country with an economy that does not do business with other countries (eg you do not import nor do you export), then you probably have more macroeconomic independence.

So if China or Japan try to move independently, they can't, because in order to buy or sell goods to other countries, they have to buy and sell those other countries' currencies. And the business of buying or selling currencies is tied to macroeconomic policy.

[yetanotherphd]

I was implying that when I said "countries in the world that are big enough to have their independent macroeconomic policy", but that was somewhat glossing over the issues you've raised.

I'm not a macro expert, but my understanding is that a country need not be completely autonomous in order to have its own macro policy. Goods cannot flow perfectly between countries, and so macro policy will always have some effect.

The more a country imports and exports, and the smaller the country, the less impact its macro policy will have.

So the reserve bank of China can influence Chinese interest rates and hence have an impact on the Chinese economy. On the other hand the reserve bank of a "small open economy" cannot do much to change interest rates.