Policy Rules in the Euro Area and International Interdependencies
van Aarle B., H. Garretsen and F. Huart (2004), “Policy Rules in the Euro Area and International Interdependencies”, Applied Economics Quarterly, 50(3), 279-297.
17 Pages Posted: 22 Apr 2020
Date Written: 2004
This paper studies the design, effects and interactions of monetary and fiscal policies in the euro area. A stylized New Keynesian model with backward and forward looking dynamics is developed and augmented with monetary and fiscal policy rules. Numerical simulations are used to assess the effects of demand and supply shocks and the role of monetary and fiscal policies in their transmission.
Keywords: EMU, Fiscal Policy, Monetary Policy, Taylor Rules
JEL Classification: F31, F41, G15
Suggested Citation: Suggested Citation