With a large-scale econometric world model we derive policy multipliers and the parameters for the utility functions for 10 EMU countries and for the ECB. The gains from cooperation are calculated by comparing two equilibria, a Nash and a cooperative equilibrium. The cooperative equilibrium is...

This paper discusses the dynamic response of employment, average hours and real wages to monetary, government spending and net taxes shocks in the UK for the 1970 Q1-2003 Q1 period. The response of labour market variables to a monetary policy shock are in line with economic theory and previous...

This paper shows that government debt creates a so far neglected wealth effect that has sizable effects on business cycle fluctuations. We present a new channel through which governments can influence cyclical fluctuations generated by any type of shock and contribute to macroeconomic stability....