The combination of discretionary montetary policy, labor-market distortions and nominal wage rigidity yields an inflation bias as monetary policy tries to exploit nominal wage contracts to address labor-market distortions. Although an inflation target eliminates this inflation bias, it creates a...

This book studies the interactions between monetary and fiscal policies in the Euro area. The policy makers are the union central bank, the German government, the French government and other governments. The policy targets are price stability in the union, full employment in Germany, full...

A comprehensive study of the international coordination of economic policy in a monetary union. It carefully discusses the process of policy competition and the structure of policy cooperation. As to policy competition, the focus is on competition between the union central bank, the German...