In this paper we carry over a static version of a New Keynesian Macro Model developed in previous papers (see Bofinger, Mayer, and Wollmershäuser 2002) to a monetary union. For a similar approach see (Uhlig 2002). We will show in particular that a harmonious functioning of a monetary union...

Current developments in Greece make clear that the rules of the European Stability and Growth Pact (SGP) were neither strict enough nor enforced strictly enough. To deal with the ongoing exit from the fiscal crisis and its related phenomena, we propose a new framework for fiscal policy...

Within this paper we specify a symmetric two country model for the euro area to evaluate monetary and fiscal policy interaction with decentralized fiscal authorities. Obviously this calls for rules which neatly balance the chances and perils. Thereby we show that stringent rules are a...

China's new economic policy made headlines in December 1984 when a leading article in the People's Daily expressed the previously unthinkable opinion that the teachings of Marx and Engels could not be expected to solve all of China's present problems. What have been the main characteristics of...

Western public opinion frequently voices uncritical applause for the economic reforms in the People's Republic of China. The expectation of large sales opportunities in the Chinese market has led to a kind of China-euphoria in certain business circles. This frequently overlooks the fact that...