Transatlantic Monetary and Fiscal Policy Interaction

Bas van Aarle, Harry Garretsen, Florence Huart and Bas Van Aarle
Authors registered in the RePEc Author Service: Bas van Aarle

No 1042, CESifo Working Paper Series from CESifo

Abstract: This paper studies the design, effects and interactions of monetary and fiscal policies in the euro-area and between the euro-area and the non euro-area. To do so, a stylized three-country model of monetary and fiscal policy rules is constructed. It is analyzed how monetary and fiscal rules affect the adjustment dynamics in the individual euro-area countries, the aggregate euro-area and the US, which is used as a proxy of the non euro-area. Four aspects play an important role in the analysis: (i) the consequences of alternative monetary and fiscal policy rules, (ii) transatlantic spillovers and policy interactions, and the dynamics of the euro and euro-area current account, (iii) the consequences of asymmetries between euroarea countries -asymmetries in macroeconomic shocks, macroeconomic structures or policy preferences-, and between the euro-area and the US, (iv) the role of alternative degrees of backward and forward looking (expectations) in output and inflation.

Keywords: EMU; fiscal policy; monetary policy (search for similar items in EconPapers)
JEL-codes: F31 F41 G15 (search for similar items in EconPapers)
Date: 2003
New Economics Papers: this item is included in nep-eec and nep-ifn
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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