This paper studies the design of the policy mix in a monetary union, that is, the institutional arrangement specifying the relationships between the various policymakers present in the union and the extent of their capacity of action. It is assumed that policymakers do not cooperate. Detailing...

Under fixed exchange rates, fiscal policy is an effective tool. According to classical views because it impacts the real exchange rate, according to Keynesian views because it impacts output. Both views have merit because the effects of government spending are asymmetric. A spending cut lowers...

We assess the role of national fiscal policies, as automatic stabilizers, within a monetary union. We use a two-country New Keynesian DGE model which incorporates non-Ricardian consumers (as in Gal? et al. 2004) and a home bias in the composition of national consumption bundles. We find that...

The aim of this paper is to investigate how the birth of a central fiscal authority or the creation of a fiscal transfer mechanism could improve the action of fiscal policy in terms of stabilization in the EMU. In particular, the paper examines the theoretical reasons to support this conclusion...

This paper analyses the structural developments underlying the evolution of public finances in Germany after qualification for EMU. For this purpose, we extend a disaggregated approach to cyclical adjustment in a way that allows us inter alia to distinguish the impact of discretionary fiscal...