One Money, but Many Fiscal Policies in Europe: What Are the Consequences?

Harald Uhlig ()

No 3296, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This Paper outlines some issues regarding the interaction of independent fiscal authorities and one central bank in the European monetary union. It points out the possibilities for coordination failures, ranging everywhere from potentially excessive deficits and free-riding problems to coordination failures in European fiscal or banking crises. As policy conclusions, some suggestions for institutional improvements are made. In particular, the Growth and Stability Pact needs strengthening rather than weakening. Furthermore, a solution for EMU-wide banking regulation needs to be found.

Keywords: Emu; Monetary policy; Fiscal policy; Free-riding; Monetary-fiscal policy interaction; Banking crisis; Fiscal crisis (search for similar items in EconPapers)
JEL-codes: E50 E60 H00 H70 (search for similar items in EconPapers)
Date: 2002-04
New Economics Papers: this item is included in nep-eec, nep-ifn and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (100)

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