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intergovernmental fiscal cooperation without such a federal authority. Using a standard macroeconomic model commonly used for policy …
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macromodel of a monetary union, we prove that there is no Pareto-superior design when cooperation between policymakers is …
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Two seemingly unconnected empirical results suggest an intriguing mechanism. First, economic integration helps harmonize prices internationally, with trade being the primary channel (Rogoff 1996, Goldberg and Knetter 1997). Second, monetary union may greatly increase the amount of trade among...
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