Macroeconomic Stabilization Policies in the EMU: Spillovers, Asymmetries, and Institutions

Giovanni Di Bartolomeo (), Jacob Engwerda, Joseph Plasmans (), Bas van Aarle, Tomasz Michalak and Bas Van Aarle
Authors registered in the RePEc Author Service: Bas van Aarle

No 1376, CESifo Working Paper Series from CESifo

Abstract: This paper studies the institutional design of the coordination of macroeconomic stabilization policies within a monetary union in the framework of linear quadratic differential games. A central role in the analysis plays the partitioned game approach of the endogenous coalition formation literature. The specific policy recommendations in the EMU context depend on the particular characteristics of the shocks and the economic structure. In the case of a common shock, fiscal coordination or full policy coordination is desirable. When asymmetric shocks are considered, fiscal coordination improves the performance but full policy coordination doesn’t produce further gains in policymakers’ welfare.

Keywords: macroeconomic stabilization; EMU; coalition formation; linear quadratic differential games (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-eec, nep-mac and nep-mon
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Related works:
Journal Article: MACROECONOMIC STABILIZATION POLICIES IN THE EMU: SPILLOVERS, ASYMMETRIES AND INSTITUTIONS (2006)
Working Paper: Macroeconomic stabilisation policies in the EMU: Spillovers, asymmetries and institutions (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1376

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