Optimal policies in international macroeconomics

Politiques optimales en macroéconomie internationale

Zineddine Alla ()
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Zineddine Alla: ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique

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Abstract: The 2008 global financial crisis and the subsequent euro area sovereign debt crisis successively forced macroeconomists to reassess this conceptual framework. This thesis is a modest contribution to the huge efforts undertaken by macroeconomists following the crisis to meet this challenge, i.e. to develop some insights about the optimal use of unconventional policy tools. To do so, this thesis is twofold. Each part intends to explore from a theoretical perspective a fundamental macroeconomic situation that called for the use of unconventional policy instruments in the recent years. The first part, "Optimal Unconventional Policy in An Open Economy" analyzes the optimal use of unconventional policy instruments by the central bank in an open economy framework. Assuming that the presence of financial frictions changes the way monetary policy affects the economy, or that the occurence of exogenous shocks breaks the "divine coincidence", this part describes how a central bank should combine an unconventional policy instrument and conventional monetary policy to favor macroeconomic stabilization. The second part, "Optimal Fiscal Policy in a Currency Union", takes the standpoint of the governement of a country located in a currency union (typically the euro area). Such a country being deprived of monetary policy autonomy, this part considers the opportunity of using fiscal policy as a stabilization tool, and describes the optimal use of fiscal devaluations following idiosyncratic exogenous shocks.

Keywords: Unconventional monetary policy; Central bank reserves; Currency union; Fiscal policy; Politique monétaire non conventionnelle; Réserves des banques centrales; Union monétaire; Politique budgétaire (search for similar items in EconPapers)
Date: 2017-03-17
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Published in Economics and Finance. Institut d'études politiques de paris - Sciences Po, 2017. English. ⟨NNT : 2017IEPP0013⟩

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