This paper examines economic policy interactions in the Economic and Monetary Union when the assessment of cyclical conditions in real time is surrounded by uncertainty. On the basis of a simple stylised model it shows that with a Nash-type of interaction different views about the output gap on...

This paper investigates common determinants of fiscal crises using a standard Early Warning System (EWS) approach, with a particular focus on the role of the financial sector. We find that the probability of a fiscal crisis decreases with the level of domestic credit (as a share of GDP), but...