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Sonderforschungsbereich 649: Ökonomisches Risiko, Humboldt-Universität Berlin >
SFB 649 Discussion Papers, HU Berlin >
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http://hdl.handle.net/10419/25200
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| Title: | | Macroeconomic policy in a heterogeneous Monetary Union  |
| Authors: | | Grimm, Oliver Ried, Stefan |
| Issue Date: | | 2007 |
| Series/Report no.: | | SFB 649 discussion paper 2007,028 |
| Abstract: | | We use a two-country model with a central bank maximizing union-wide welfare and two fiscal authorities minimizing comparable, but slightly different country-wide losses. We analyze the rivalry between the three authorities in seven static games. Comparing a homogeneous with a heterogeneous monetary union, we find welfare losses to be significantly larger in the heterogeneous union. The best-performing scenarios are cooperation between all authorities and monetary leadership. Cooperation between the fiscal authorities is harmful to both the whole union's and the country-specific welfare. |
| Subjects: | | monetary union heterogeneities policy game simultaneous policy sequential policy coordination discretionary policies |
| JEL: | | E52 E61 F42 |
| Document Type: | | Working Paper |
| Appears in Collections: | | SFB 649 Discussion Papers, HU Berlin
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