Towards a Balanced Policy Mix under EMU: Co-ordination of Macroeconomic Policies and ‘Economic Government’?

Ansgar Belke

Journal of Economic Integration, 2002, vol. 17, 21-53

Abstract:

What kind of additional co-operation (-ordination) is necessary and feasible to cope with the new institutional set-up under EMU? Starting from the episode of the repo rate cut by the ECB in early 1999, it is asked what would have happened under a business as usual scenario. In this case, the pre-Maastricht pattern of fiscal policy would have quickly led to grave problems. A promising alternative monetary-fiscal policy mix in the first half of 1999 consisted of a restrictive fiscal policy and a monetary policy which had - within the bounds of price stability - some leeway to act counter-cyclically.

Keywords: EMU; Fiscal and Monetary Policy; Policy Coordination; Policy Mix; Policy Rules (search for similar items in EconPapers)
JEL-codes: E58 E61 E63 (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0183

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