18 results with keyword: 'optimal fiscal policy rules in a monetary union'
(Thus, government spending in country A reactions to the difference between output or inflation in A compared to B. They continue to react to their own debts levels.) A key result
N/A
We show that rules that relate government spending to lagged inflation, output and the terms of trade can significantly reduce the impact of asymmetric shocks.5 We also show that
N/A
Stabiliz- ing the aggregate monetary policy furthermore anchors the output and inflation dynamics of the small country inside the union.. There is no feedback from the small economy
N/A
First, the price level cannot be raised instantaneously to inflate public debt away because monetary policy follows an interest rate rule that responds to inflation.. Second,
N/A
As shown in Galí and Monacelli (2005) in the context of a related model, when each individual country has its own currency and an autonomous monetary policy (as opposed to the
N/A
When households of only one region can migrate, optimal policy entails a deviation from the Friedman rule and a production subsidy (tax) if there is underinvestment (overinvestment)
N/A
On the other hand, under incomplete markets, complete markets and the optimal transfer union, home bias is welfare enhancing as a more stable consumption wedge through capital
N/A
In this paper I investigate the consequences of real wage rigidities for optimal fiscal and monetary policy in a framework of a multicountry NK model of a currency union, where
N/A
Fiscal Policy Rules for Stabilisation and Growth: A Simulation Analysis of Deficit and Expenditure Targets in a Monetary Union.. Tilman Brück
N/A
Macroeconomic indicators; fiscal policy; euro area fiscal stance; fiscal union; Economic and Monetary Union; fiscal coordination.. Word
N/A
When dealing with disturbances to the deficit process, inflation targeters let the real interest rate fall below zero both under commitment and under discretion. This prevents
N/A
Galí, Jordi, and Tommaso Monacelli (2008): "Optimal Monetary and Fiscal Policy in a Currency Union," Journal of International Economics, vol... Eggertsson, Gauti, and
N/A
The purpose of the empirical work is to test whether the restrictions on …scal policy necessary for the monetary authority to have control of the price level hold in the EMU
N/A
In a Mundellian monetary union, (i) if shocks are sufficiently correlated across countries and tastes are sufficiently variable, then the monetary union allocation will yield
N/A
We contrast the monetary union model with nominal government debt with the e¢ cient benchmark of a standalone country that has full control over its monetary policy, which as shown
N/A
In the face of credit market disturbances, money targeting is generally preferable, except in the case of an internal shock associated with high asymmetry between national
N/A
More in details, in the deflationary (inflationary) regime where expansionary fiscal policy must be supported by a restrictive (expansionary) monetary one, optimal monetary
N/A