Monetary Conservatism and Fiscal Coordination in a Monetary Union

8 Pages Posted: 13 Feb 2006

See all articles by Giovanni Di Bartolomeo

Giovanni Di Bartolomeo

Sapienza University of Rome, Department of Economics and Law

Nicola Acocella

University of Rome I - Department of Methods and Models for Economics, Territory and Finance (MEMOTEF)

Patrizio Tirelli

Università degli Studi di Milano-Bicocca - Center for Interdisciplinary Studies in Economics, Psychology & Social Sciences (CISEPS); Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS); Università degli Studi di Milano-Bicocca - Center for European Studies (CefES)

Abstract

In a monetary union time inconsistency provides the rationale for central bank conservativeness and against the coordination of national fiscal policies. We show that this result is based on the implicit assumption of exogenous labor markets and that, once wage setters' behavior is explicitly modelled, the economic performance can be improved by fiscal policy coordination and a less conservative monetary policy stance.

Suggested Citation

Di Bartolomeo, Giovanni and Acocella, Nicola and Tirelli, Patrizio, Monetary Conservatism and Fiscal Coordination in a Monetary Union. Available at SSRN: https://ssrn.com/abstract=880524 or http://dx.doi.org/10.2139/ssrn.880524

Giovanni Di Bartolomeo (Contact Author)

Sapienza University of Rome, Department of Economics and Law ( email )

via Castro del Laurenziano 9
Roma, 00191
Italy

Nicola Acocella

University of Rome I - Department of Methods and Models for Economics, Territory and Finance (MEMOTEF) ( email )

Via del Castro Laurenziano 9
Roma, Roma 00161
Italy
+390649766359 (Phone)

HOME PAGE: http://www.memotef.uniroma1.it/newdip/utenti/acocellanicola/

Patrizio Tirelli

Università degli Studi di Milano-Bicocca - Center for Interdisciplinary Studies in Economics, Psychology & Social Sciences (CISEPS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milano, 20126
Italy

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milan, 20126
Italy

Università degli Studi di Milano-Bicocca - Center for European Studies (CefES)

U6 Building
Viale Piero e Alberto Pirelli, 22
Milano, 20126
Italy

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