The enlargement of the European Monetary Union is likely to lead to an increase of uncertainty about the transmission of monetary policy for the larger union. Adding new members to the central bank council will in addition imply that the preferences of the enlarged council will be uncertain in...

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...

We model the optimal reaction of a public PAYG pension system to demographic shocks. We compare the ex-ante first best and second best solution of a Ramsey planner with full commitment to the outcome under simple third best rules that mimic the pension systems observed in the real world. The...