Should the ECB Coordinate EMU Fiscal Policies?

36 Pages Posted: 11 Feb 2018

See all articles by Tatiana Kirsanova

Tatiana Kirsanova

University of Glasgow - Adam Smith Business School

Celsa Machado

Instituto Politécnico do Porto - Instituto Superior de Contabiladade e Administracao do Porto (ISCAP)

Ana Paula C Ribeiro

Universidade do Porto

Date Written: November 3, 2017

Abstract

In a monetary union where fiscal authorities act strategically fiscal cooperation is unlikely to emerge as an equilibrium. Even when the cooperative outcome is the best for a national fiscal authority, it is either not a Nash equilibrium, or only one of several Nash equilibria. The monetary authority may have an important coordinating role; however, the Pareto-preferred equilibrium will not necessarily involve cooperation.

Keywords: Monetary and Fiscal Policy Coordination, Monetary Union

JEL Classification: E52, E61, E63

Suggested Citation

Kirsanova, Tatiana and Machado, Celsa and Ribeiro, Ana Paula C, Should the ECB Coordinate EMU Fiscal Policies? (November 3, 2017). Available at SSRN: https://ssrn.com/abstract=3064877 or http://dx.doi.org/10.2139/ssrn.3064877

Tatiana Kirsanova (Contact Author)

University of Glasgow - Adam Smith Business School ( email )

Glasgow, Scotland
United Kingdom

Celsa Machado

Instituto Politécnico do Porto - Instituto Superior de Contabiladade e Administracao do Porto (ISCAP) ( email )

4465-004 Rua Jaime Lopes Amorim
Matosinhos, 4465-004
Portugal

Ana Paula C Ribeiro

Universidade do Porto ( email )

Rua Dr. Roberto Frias
4200-464 Porto
Portugal

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