Close coordination of national fiscal policy and surveillance of competitiveness seem highly desirable within a monetary union. But are they also feasible? This note argues that surveillance of competitiveness risks concentrating on symptoms (rising wages in the non-tradable sector), rather than...

This paper discusses stabilization policy in the presence of bands for the exchange rate. The bands are modelled in a probabilistic sense: monetary policy has to be such as to keep the probability, that the exchange rate stays within the bands, above a certain threshold. In contrast to other...

This paper provides a comprehensive examination of the role of intertemporal risk sharing – or consumption smoothing – in absorbing the impact of asymmetric shocks in the euro area. We attempt to disentangle the role of international credit markets from domestic net savings and that of...