KIRSANOVA, TATIANA; SATCHI, MATHAN; VINES, DAVID; … - In: Journal of Money, Credit and Banking 39 (2007) 7, pp. 1759-1784
This paper investigates the importance of fiscal policy in providing macroeconomic stabilization in a monetary union. We use a microfounded New Keynesian model of a monetary union, which incorporates persistence in inflation and non-Ricardian consumers, and derive optimal simple rules for fiscal...