Monetary Union: The Ins and Outs of Strategic Delegation

CEPR Discussion Paper Series Number 1800

Posted: 3 Jun 1998

See all articles by Paul Levine

Paul Levine

School of Economics, University of Surrey

Joseph Pearlman

London Metropolitan University - Department of Economics, Finance and International Business (EFIB)

Date Written: March 1998

Abstract

This paper addresses the conduct of monetary and fiscal policy in a closed trading bloc consisting of "ins" forming a monetary union and "outs" who retain monetary sovereignty. All governments can opt for a particular choice of institutional arrangement for their central bank (CB), however, and delegate monetary policy to it with varying degrees of independence or, equivalently, "conservatism". This paper examines the outcome when these decisions are individually rational for governments and are taken strategically, taking in to account the intra-country interactions between fiscal authorities and their own central bank, and the inter-country interactions between the same players.

JEL Classification: E52, E58, F33

Suggested Citation

Levine, Paul L. and Pearlman, Joseph G., Monetary Union: The Ins and Outs of Strategic Delegation (March 1998). CEPR Discussion Paper Series Number 1800. Available at SSRN: https://ssrn.com/abstract=89493

Paul L. Levine (Contact Author)

School of Economics, University of Surrey ( email )

Guildford
Surrey GU2 7XH
United Kingdom
+44 1483 259 380 Ext. 2773 (Phone)
+44 1483 259 548 (Fax)

Joseph G. Pearlman

London Metropolitan University - Department of Economics, Finance and International Business (EFIB) ( email )

Economics Subject Group, LMBS
London EC2M 6SQ, EC2M 6SQ
United Kingdom

Register to save articles to
your library

Register

Paper statistics

Abstract Views
430
PlumX Metrics