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The Fragility of two Monetary Regimes: The European Monetary System and the Eurozone

Ji, Yuemei; Grauwe, Paul De - CESifo - 2013

We analyze the similarities and the differences in the fragility of the European Monetary system (EMS) and the Eurozone … foreign exchange markets while in the Eurozone it was the absence of a lender of last resort in the long-term government bond … Eurozone the roles were reversed. The national central banks that became part of the Eurosystem were strengthened. This came at …

Persistent link: https://www.econbiz.de/10010877906

Uncertainty and Fiscal Policy in an Asymmetric Monetary Union

Hefeker, Carsten; Zimmer, Blandine - CESifo - 2008

The paper examines the monetary-fiscal interactions in a monetary union model with uncertainty due to imperfect central bank transparency. We first show that monetary uncertainty disciplines fiscal policymakers and thereby reduces taxes, average inflation and output distortions. However, as more...

Persistent link: https://www.econbiz.de/10005013047

Fiscal Transfers in a Monetary Union with Exit Option

Hefeker, Carsten; Neugart, Michael - CESifo - 2015

It is widely debated whether a monetary union has to be accompanied by a fiscal transfer scheme to accommodate asymmetric shocks. We build a model of a monetary union with a central bank and two heterogeneous countries that are linked by a fiscal transfer scheme with repercussions on monetary...

Persistent link: https://www.econbiz.de/10011202966

Federal Monetary Policy

Hefeker, Carsten - CESifo - 2001

What is the optimal institutional structure for an independent central bank? The paper shows when it will be optimal for a country to have a central bank to be organized according to federal, purely national or a combination of both aspects. The analysis is then extended to a supranational...

Persistent link: https://www.econbiz.de/10005766079

One Size Must Fit All. National Divergences in a Monetary Union

Gros, Daniel; Hefeker, Carsten - CESifo - 2000

What policy objective should a common central bank in a heterogeneous monetary union pursue? Should it base its decisions on the EU-wide average of inflation and growth or should it instead focus on (appropriately weighted) national rates of inflation and growth? We find that a central bank that...

Persistent link: https://www.econbiz.de/10005094223

Common Monetary Policy with Asymmetric Shocks

Gros, Daniel; Hefeker, Carsten - CESifo - 2002

What policy objective should a common central bank in a heterogeneous monetary union pursue? Should it base its decisions on the EU-wide average of inflation and growth or should it instead focus on (appropriately weighted) national welfare losses based on national rates of inflation and growth?...

Persistent link: https://www.econbiz.de/10005051499

The Impact of Fiscal Rules on Public Finances: Theory and Empirical Evidence for the Euro Area

Marneffe, Wim; Aarle, Bas Van; Wielen, Wouter Van Der; … - CESifo - 2010

This paper presents a review of the most significant fiscal rules policymakers can choose from. The insights from this review are then applied to the current budgetary situation of the European Union. In the European Union, the supranational Stability and Growth Pact (SGP) should provide the...

Persistent link: https://www.econbiz.de/10008833927

One Country, One Vote? Labor Market Structure and Voting Rights in the ECB

Berger, Helge; Hefeker, Carsten - CESifo - 2004

The pending enlargement of the European Monetary Union (EMU) has brought to the fore the discussion of the voting right distribution in the European Central Bank (ECB) council. We show that, in a model where labor unions internalize the inflationary consequences of wage setting, deviating from a...

Persistent link: https://www.econbiz.de/10005766246

Macroeconomic Policy Making, Exchange Rate Adjustment and Current Account Imbalances in Emerging Markets

Duarte, Pablo; Schnabl, Gunther - CESifo - 2014

Since a series of crisis events after 2007, the discussion about the adjustment channels of current account imbalances has been revived. We discuss the effectiveness of exchange rates versus macroeconomic policies to rebalance current accounts for a set of 86 mainly emerging market economies. We...

Persistent link: https://www.econbiz.de/10011075721

Monetary Policy and Redistribution: What can or cannot be Neutralized with Mirrleesian Taxes

Gahvari, Firouz; Micheletto, Luca - CESifo - 2012

This paper develops an overlapping-generations model with heterogeneous agents in terms of earning ability and cash-in-advance constraint. It shows that tax policy cannot fully replicate or neutralize the redistributive implications of monetary policy. While who gets the extra money becomes...

Persistent link: https://www.econbiz.de/10009645639

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