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MAGKS Joint Discussion Paper Series in Economics, Universität Marburg >
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http://hdl.handle.net/10419/30115
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| Title: | | Uncertainty and fiscal policy in an asymmetric monetary union  |
| Authors: | | Hefeker, Carsten Zimmer, Blandine |
| Issue Date: | | 2009 |
| Series/Report no.: | | Joint discussion paper series in economics 2009,13 |
| Abstract: | | We examine monetary and fiscal interactions in a monetary union model with uncertainty due to imperfect central bank transparency. It is first shown that monetary uncertainty discourages excessive taxation and may thus reduce average inflation and output distortions. However, as countries enter the monetary union, this tax-restraining effect of uncertainty is mitigated. The monetary union may hence lead to higher fiscal distortions in some member countries, depending on governments’ spending targets and on the change in the degree of uncertainty implied by common monetary policy. |
| Subjects: | | Monetary union fiscal policy transparency of monetary policy asymmetries. |
| JEL: | | E58 E63 F36. |
| Document Type: | | Working Paper |
| Appears in Collections: | | MAGKS Joint Discussion Paper Series in Economics, Universität Marburg
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