Monetary and Fiscal Policy in the EMU: Conflict or Coordination?

Séverine Menguy ()
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Séverine Menguy: Universite de Paris-Ouesté-Nanterre -La Defense, Postal: EconomiX, Université de Paris-Ouest -Nanterre -La Defense, 200 avenue de la, Republique, 92001 Nanterre-Cedex, France

Journal of Economic Integration, 2011, vol. 26, 361-385

Abstract: The common central bank of a monetary union tends to lead a more accommodative monetary policy in order to avoid the default of the moderately indebted member countries whereas the most hardly indebted countries have to default. The optimal inflation rate increases the more numerous are the highly indebted countries in the union, the higher are the interest rates on the risk free capital and the smaller are the interest rates on nominal bonds in the fiscally weak countries. This study considers conflict and coordination between integrated public.

Keywords: Monetary Policy; Monetary Union; Public Debt; Inflation Rate (search for similar items in EconPapers)
JEL-codes: E63 H63 H77 H87 (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0541

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