Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/184709
Authors: 
Bierbrauer, Christoph
Year of Publication: 
2017
Series/Report no.: 
Working Paper 109
Abstract: 
We present an analytically tractable two-country New Open Economy Macroeconomics model of a currency union featuring an overlapping gen- erations structure of the Blanchard (1985)-Yaari (1965) type. It enables us to study the transmission and spillover effects of a wider range of fiscal shocks in comparison to the standard model. We show that, depending on the financing decision of the government, fiscal policy measures can have very different effects on key macroeconomic vari- ables such as consumption and output. Moreover, the spillovers of national fiscal policy depend on the composition of government spending, the type of the fiscal measure and the cross-country substitutability between goods.
Subjects: 
Overlapping generations
New open economy macroeconomics
Public Debt
Decentralized fiscal policy
Monetary union
JEL: 
E62
F33
F41
H31
H50
H63
Document Type: 
Working Paper

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