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Title:Macroeconomic stabilization policies in the EMU : spillovers, asymmetries, and institutions PDF Logo
Authors:Di Bartolomeo, Giovanni
Engwerda, Jacob
Plasmans, Joseph
van Aarle, Bas
Michalak, Tomasz
Issue Date:2005
Series/Report no.:CESifo working papers 1376
Abstract:This paper studies the institutional design of the coordination of macroeconomic stabilization policies within a monetary union in the framework of linear quadratic differential games. A central role in the analysis plays the partitioned game approach of the endogenous coalition formation literature. The specific policy recommendations in the EMU context depend on the particular characteristics of the shocks and the economic structure. In the case of a common shock, fiscal coordination or full policy coordination is desirable. When asymmetric shocks are considered, fiscal coordination improves the performance but full policy coordination doesn?t produce further gains in policymakers? welfare.
Subjects:macroeconomic stabilization
EMU
coalition formation
linear quadratic differential games
JEL:E63
E61
E58
E17
C70
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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