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18 results with keyword: 'optimal fiscal policy rules in a monetary union'

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

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2021
Optimal Fiscal Policy Rules in a Monetary Union

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

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2021
Optimal Simple Rules for Fiscal Policy in a Monetary Union

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

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2021
Optimal Fiscal Policy in a Monetary Union

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,

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2021
Optimal monetary and fiscal policy in a currency union

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

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2021
Optimal Monetary and Fiscal Policy with Migration in a Currency Union

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)

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2020
Optimal fiscal transfers in a monetary union

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

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2021
Taking Real Rigidities Seriously: Implications for Optimal Policy Design in a Currency Union

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

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2021
Fiscal Policy Rules for Stabilisation and Growth: A Simulation Analysis of Deficit and Expenditure Targets in a Monetary Union

Fiscal Policy Rules for Stabilisation and Growth: A Simulation Analysis of Deficit and Expenditure Targets in a Monetary Union.. Tilman Brück

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A European Fiscal Union of Macroeconomic Indicators: Failing forward with the euro area fiscal stance

Macroeconomic indicators; fiscal policy; euro area fiscal stance; fiscal union; Economic and Monetary Union; fiscal coordination.. Word

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2022
On (Sub) Optimal Monetary Policy Rules under Untied Fiscal Hands

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

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2021
Topics in Macroeconomics III: Macroeconomic Policy II

Galí, Jordi, and Tommaso Monacelli (2008): "Optimal Monetary and Fiscal Policy in a Currency Union," Journal of International Economics, vol... Eggertsson, Gauti, and

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2021
Fiscal Policy in the European Monetary Union

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

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2021
Overturning Mundell: fiscal policy in a monetary union

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

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2021
Fiscal policy and inflation in a monetary union

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

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2021
Heterogeneous "Credit Channels" and Optimal Monetary Policy in a Monetary Union

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

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2021
Fiscal and monetary interaction under monetary policy uncertainty

More in details, in the deflationary (inflationary) regime where expansionary fiscal policy must be supported by a restrictive (expansionary) monetary one, optimal monetary

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2021
Essays on Fiscal Policy in a Monetary Union

To carve out the impact of the financing decision on the effects of fiscal shocks, we discuss the extreme case in which the assumed increase in public consumption is completely

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2021

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