Staying Together or Breaking Apart: Policy-makers' Endogenous Coalitions Formation in the European Economic and Monetary Union

Bas van Aarle (), Giovanni Di Bartolomeo (), Jacob Engwerda () and Joseph E. Plasmans ()

No CESifo Working Paper No. 748, CESifo Working Paper Series from CESifo Group Munich

Abstract: In this paper, we analyze coordination of macroeconomic stabilization policies within the EMU by focusing, in a dynamic set-up, on asymmetries, externalities, and the existence of a multi-country context. We study how coalitions among fiscal and monetary authorities are formed and what are their effects on the stabilization of output and price. In particular, our attention is directed to study the consequences on these issues of different institutional contexts in which policy-makers may act. Among other results, we found that, in the presence of externalities, the occurrence of asymmetries is a necessary but not a sufficient condition for cooperation.

Keywords: macroeconomic stabilization; EMU; coalition formation. (search for similar items in EconPapers)
JEL-codes: C70 E17 E58 E61 E63 (search for similar items in EconPapers)
Date: 2002
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Related works:
Working Paper: Staying Together or Breaking Apart: Policy-Makers’ Endogenous Coalitions Formation in the European Economic and Monetary Union (2003)
Working Paper: Staying together or breaking apart: Policy-makers' endogenous coalitions formation in the European economic and monetary Union (2002)
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