The transmission of monetary and fiscal policies in an international context is one of the most prominent topics in the realm of international finance. In particular, researchers are interested in the effects of the respective policy on exchange rate movements, international price level differentials, output stimulation, and welfare effects. Since Mundell (1963) and Fleming (1962) economists try to address these issues by formal models. While well established not only in the scientific arena but also in practice, international macro-models of the Mundell-Fleming (MF) type have a severe drawback: the entire absence of microfoundations results in the use of ad-hoc welfare criteria for the evaluation of alternative policy regimes. Moreover, MF models do not account for intertemporal budget constraints which are very important for a deeper understanding of exchange rate and current account dynamics. Starting with the publication of the seminal Redux model of Obstfeld and Rogoff (1995), a new promising strand of the international macroeconomics literature emerged, that combines rigorous microfoundations with the MF assumption of nominal rigidities. This approach allows for an explicit welfare analysis on the basis of the households' preference structure. Today, the so-called New Open Economy Macroeconomics (NOEM) framework provides the standard workhorse for the analysis of international monetary and fiscal policy transmission processes. In this dissertation, we aim to contribute to the discussion of fiscal policy in the field of New Open Economy Macroeconomics by exploring its international transmission and the associated welfare effects under alternative exchange rate regimes. Specifically, we consider two-country general equilibrium models with either flexible exchange rates or a monetary union regime. Under flexible exchange rates, the welfare effects of fiscal policy depend crucially on the expenditure switching and terms-of-trade effects of the exchange rate response. We demonstrate that the direction of the equilibrium exchange rate movement in the light of fiscal policy is very sensitive to the specification of money demand. This issue is addressed by adopting competing microfoundations of money demand that imply different scale variables. First, we present a flexible exchange rate model and a monetary union model with money-in-the-utility (MIU), which is standard in the NOEM literature and leads to private consumption as the scale variable of money demand. Second, we contrast the results with models where money enters via a cash-in-advance (CIA) constraint. When the CIA constraint comprises both consumption purchases and tax payments of households, the scale variable of money demand amounts to total absorption in equilibrium. The major difference between the two approaches lies in the exchange rate response to fiscal shocks in the flexible regime. While the standard MIU setting implies a depreciation of the exchange rate following a domestic fiscal expansion, the augmented CIA constraint yields an appreciation. The welfare effects of fiscal policy hinge essentially on the direction of the equilibrium exchange rate response, but are also very sensitive to the assumptions about the pricing behavior of firms that are engaged in international trade. In the standard Redux model as well as in most other NOEM contributions dealing with fiscal policy, it is assumed that all producers set prices in their domestic currency. As a consequence, temporary stickiness of prices does not lead to deviations from the law of one price when the exchange rate changes. However, empirical research suggests that a failure of the law of one price is widespread even for internationally traded goods. Therefore, more recent theoretical research has accounted for a different type of price setting behavior, in the literature known as pricing-to-market (PTM): Firms are able to segment markets and may set prices in the currency of the consumer. In the context of NOEM models, pricing-to-market was pioneered by Betts and Devereux (2000). In times of sticky prices a surprise nominal exchange rate movement results in deviations from the law of one price if producers follow consumer currency pricing. In the present work, we follow this line of research and assume that a fraction of producers price goods to market, while the remaining producers pursue standard producer currency pricing. An evaluation of the welfare effects of fiscal policy under the different exchange rate regimes and money demand specifications reveals that the results depend both qualitatively and quantitatively on the degree of pricing-to-market.