Should the ECB Coordinate EMU Fiscal Policies?
36 Pages Posted: 11 Feb 2018
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: 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
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