Monetary and Fiscal policy Interaction in the Euro Area with Different Assumptions on the Phillips Curve
Peter Bofinger () and
Eric Mayer ()
No 4790, CEPR Discussion Papers from C.E.P.R. Discussion Papers
In this Paper we carry over a static version of a New Keynesian Macromodel a la Clarida Gali Gertler (1999) to a monetary union. We will show in particular that a harmonious functioning of a monetary union critically depends on the correlation of shocks that hit the currency area. Additionally a high degree of integration in product markets is advantageous for the ECB as it prevents that national real interest rates can drive a wedge between macroeconomic outcomes across member states. In particular small countries are vulnerable and therefore in need of fiscal policy as an independent stabilization agent with room to breath.
Keywords: fiscal policy; inflation targeting; monetary policy; policy coordination (search for similar items in EconPapers)
JEL-codes: E50 E60 H70 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-fmk, nep-mac, nep-mon and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at firstname.lastname@example.org
Journal Article: Monetary and Fiscal Policy Interaction in the Euro Area with Different Assumptions on the Phillips Curve (2007)
Working Paper: Monetary and Fiscal Policy Interaction in the Euro Area with different assumptions on the Phillips curve (2004)
Working Paper: Monetary and fiscal policy interaction in the Euro area with different assumptions on the Phillips curve (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:4790
Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=4790
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().