The international monitoring of public finances in EMU member states is an essential element of the Stability and Growth Pact. Part of evaluating government budgets involves determining the sustainability of the envisaged consolidation measures. The academic and political debate on this topic...

It is widely debated whether a monetary union has to be accompanied by a fiscal transfer scheme to accommodate asymmetric shocks. We build a model of a monetary union with a central bank and two heterogeneous countries that are linked by a fiscal transfer scheme with repercussions on monetary...

The paper explores the interaction between the proposed monetary union for ECOWAS and structural reforms of fiscal policy. The effects depend to a large extent on the degree of similarity of member countries. In a monetary union of similar countries, member states run a more distortive fiscal...