Chocs et règles de politique économique en UEM

Florence Huart, Bas van Aarle and Harry Garretsen

Economie & Prévision, 2006, vol. n° 173, issue 2, 43-63

Abstract: This paper analyzes how monetary and fiscal policy rules can achieve macroeconomic stabilization in a two-country model of an economic and monetary union. Three specific factors play a role in absorbing the effects of macroeconomic shocks: (i) the degree offlexibility ofeconomic-policy rules; (ii) structural asymmetriesbetweencountries; (iii) the nature of inflation expectations. Real and nominal adjustments of national economies are helped by a combination of (i) a Taylor rulewith moderateinterest-rate smoothing and (ii) national fiscal rules thatrely on moderate public-deficit smoothing and let automatic fiscal stabilizers work.

Keywords: EMU; monetary policy; fiscal policy; Taylor rules (search for similar items in EconPapers)
Date: 2006
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