Monetary and Fiscal Policy Interaction in the EMU: A Dynamic Game Approach

Bas van Aarle, Jacob Engwerda, Joseph Plasmans () and Bas Van Aarle
Authors registered in the RePEc Author Service: Bas van Aarle

No 437, CESifo Working Paper Series from CESifo

Abstract: The interaction of monetary and fiscal policies is a crucial issue in a highly integrated economic area as the European Union. We argue that EMU, which introduced a common monetary policy and restrictions on fiscal policy at the national level, increases the need for macroeconomic policy cooperation. To study the effects of policy cooperation we compare the effects of three alternative policy regimes in a stylized dynamic model of a monetary union: (i) noncooperative monetary and fiscal policies, (ii) partial cooperation, and (iii) full cooperation both in symmetric and asymmetric settings where countries differ in structural characteristics, policy preferences and/or bargaining power. The paper introduces an analysis of coalitional behavior in a dynamic setting into the literature.

Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo_wp437.pdf (application/pdf)

Related works:
Journal Article: Monetary and Fiscal Policy Interaction in the EMU: A Dynamic Game Approach (2002)
Working Paper: Monetary and fiscal policy interaction in the EMU: A dynamic game approach (2002)
Working Paper: Monetary and Fiscal Policy Interaction in the EMU: A Dynamic Game Approach (2001)
Working Paper: Monetary and fiscal policy interaction in the EMU: A dynamic game approach
Working Paper: Monetary and fiscal policy interaction in the EMU: A dynamic game approach
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_437

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().