Title
Monetary and fiscal policy interaction under EMU: a dynamic game approach Monetary and fiscal policy interaction under EMU: a dynamic game approach
Author
Faculty/Department
Faculty of Applied Economics
Administrative Services
Publication type
report
Publication
Antwerpen :UFSIA, [*]
Source (series)
Research paper / UFSIA, Faculty of Applied Economics , 1999:020
Volume/pages
22 p.,
Carrier
E
Target language
English (eng)
Affiliation
University of Antwerp
Abstract
The interaction of monetary and fiscal policies is a crucial issue in a highly integrated economic area as the European Union. We investigate to which extent the EMU, that introduced a common monetary policy and restrictions on fiscal policy at the national level, benefits from macroeconomic policy cooperation due to the various interactions, spillovers and externalities from national macroeconomic policies. To study the effects of policy cooperation we compare the impact of three alternative policy regimes in a stylized dynamic model of the EMU: (i) non-cooperative 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 behaviour in a dynamic setting into the literature.
Full text (open access)
https://repository.uantwerpen.be/docman/irua/48223a/59ceb915.pdf
Handle