"This paper studies the effects of monetary policy rules in a monetary union. The focus of the analysis is on the interaction between the fiscal policy of member countries (regions) and the central monetary authority. When capital markets are integrated, the fiscal policy of one country will...

This paper studies the incidence of alternative patterns of wage bargaining in an open two-country monetary Union. Wages are fixed by trade-unions for two periods, either at the national or the monetary Union level. It is shown that the best solution regarding unemployment depends on the nature...