The Economic and Monetary Union Model: Theoretical Underpinnings of Macroeconomic Policy

Philip Arestis and Malcolm Sawyer ()

Chapter 3 in Economic and Monetary Union Macroeconomic Policies, 2013, pp 43-66 from Palgrave Macmillan

Abstract: Abstract The Economic and Monetary Union (EMU) has a clear set of monetary and fiscal policies associated with the Stability and Growth Pact (SGP). We argue here that those policies have to be understood by reference to a particular macroeconomic analysis. Specifically, it is argued that the macroeconomic policy framework for fiscal and monetary policy with EMU is embedded in what is now known as the ‘New Consensus Macroeconomics’.1 Any specific macroeconomic analysis puts forward a view of how the economy operates, what are the issues which policy can and should address, and the effectiveness (or otherwise) of particular policies (for development of this argument at a general level see Arestis and Sawyer, 2010a), and the New Consensus Macroeconomics is no exception.

Keywords: Interest Rate; Monetary Policy; Central Bank; Fiscal Policy; Euro Area (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-31789-6_3

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DOI: 10.1057/9781137317896_3

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