Central Bank Independence and Public Debt Convergence in an Open Economy Dynamic Game

P. Della Posta

Economics Working Papers from European University Institute

Abstract: A realistic objective function for the atomistic central Bank and Treasury of a country adhering to a fixed exchange rate agreement like the EMS, would contain the public debt ;evel, to be minimized for example to meet one of the requirements contained in the Maastricht Treaty, and foreign reserves, that cannot go beyond a lower limit if the country does not want to renege on the exchange rate commitment.

Keywords: GAMES; CENTRAL BANKS; DEBT (search for similar items in EconPapers)
JEL-codes: E52 E58 E61 E62 F41 (search for similar items in EconPapers)
Pages: 34 pages
Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:eui:euiwps:eco97/28

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