Given a monetary Union which is heterogeneous at the level of labour market flexibility, this paper investigates the effects in terms of macroeconomic stabilization of the different degrees of fiscal coordination between governments. We use a static Keynesian model within a closed monetary Union...

Given a Monetary Union which is heterogeneous at the level of labour market flexibility, this paper studies the relative effectiveness of two fiscal policy games, i.e. Nash equilibrium and fiscal coordination in terms of macroeconomic stabilization. We will use a static Keynesian model within a...

The subsidiarity principle governing the collection of statistical data in a monetary union may result in asymmetrical information. The national governments may be tempted to distort their economic and financial data communicated to the union’s central bank in order to influence its monetary...