Using a three countries model with flexible exchange rates, this study tries to analyze the situation in an asymmetric monetary area around a big country. The model consider a stochastic framework where the monetary policy is used to stabilize the inflation and the current account. The monetary...

The recent economic and financial crisis in the euro area seems to question the theoretical solutions to coordinate economic policies in monetary unions. In this paper, we adress the current system of economic policy coordination within the WAEMU during 1994-2010. Using game theory and...

The present study is, in particular, an attempt to test the relationship between tax level and political stability by using some economic control variables and to see the relationship among government effectiveness, corruption, and GDP. For the purpose, we used the Vector Autoregression (VAR)...

The paper discusses moral hazard problems as a potential reason for the observed strong increase of indebtedness of German states (Länder). Indeed, financial markets do not react much to the strong differences in fiscal fundamentals of German Länder. Using a case study, the paper also shows...

This paper criticizes the idea to conceive the fiscal federalist reform in Italy as a tool to empower central-northern regions to retain resources otherwise wasted in the South. We argue that such a view muddles up efficiency and redistribution issues, thus threatening the legitimate...

The research on the relationship between macroeconomic stability and fiscal decentralization has been rather inconclusive about the benefits of fiscal decentralization. The current paper is the first to investigate the effect of fiscal decentralization on macroeconomic stability by using Misery...

This paper argues that the two-percentage point cut in the GST to 5 per cent proposed by the Conservatives in the January 2006 Canadian federal election and implemented in the 2007 budget was not “stupid” as suggested by many economists. To the contrary, it fortuitously turned out to provide...

We survey the empirical literature on fiscal decentralization (FD) and analyze the advantages and disadvantages of shifting fiscal responsibilities to sub national governments. We suggest several conclusions: First, there are large disagreements regarding the influence of FD on the size of...

This paper reviews the issues that would arise if Quebec were to separate from Canada. It also presents quantitative estimates of the likely orders of magnitude of their economic impact both on Quebec and the Rest of Canada. Its overall conclusion is that Quebec would be much harder hit than the...