I build a quantitative two-country DSGE model of the European Union (EU) and investigate whether there are welfare gains from fiscal policy cooperation between the new EU members and the euro area (EMU). Fiscal cooperation is defined in terms of joint maximization of the weighted average of...

This paper models both the supply and demand of Australian non-commodity exports. We derive long-run export demand relationships from first principles. On the demand side, the paper finds a relatively low substitution elasticity between Australian exports and a broad basket of foreign produced...