In this paper we analyze the issue of cooperation among national fiscal authorities in a monetary union within the framework of their strategic interactions with the common monetary authority. We find that: a) in the lack of cooperation with the central bank, cooperation among fiscal authorities is not desirable; b) if the authorities have different targets, both fiscal leadership and monetary leadership result in a Pareto improvement with respect to the Nash outcome; however, the central bank is better off acting as a follower rather than as a leader; c) harmonization of targets makes policy coordination unnecessary, unless countries are hit by asymmetric shocks: in this case, either cooperation among national fiscal authorities or state-contingency of targets are necessary to obtain an efficient outcome. These findings are applied to the EMU case. Keywords: Fiscal and Monetary Policy Coordination, Monetary Union, International Fiscal Issues JEL Classification: E61, F42, H87
On the Coordination of National Fiscal Policies in a Monetary Union / DE BONIS V; DELLA POSTA P. - In: ECONOMIA INTERNAZIONALE. - ISSN 0012-981X. - 3, 63(2010), pp. 273-296.
|Autori:||DE BONIS V; DELLA POSTA P|
|Titolo:||On the Coordination of National Fiscal Policies in a Monetary Union|
|Anno del prodotto:||2010|
|Appare nelle tipologie:||1.1 Articolo in rivista|