Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/211631 
Year of Publication: 
1992
Series/Report no.: 
Bank of Finland Discussion Papers No. 2/1992
Publisher: 
Bank of Finland, Helsinki
Abstract: 
The paper considers the role common fiscal arrangements might have to play in the operation of a European monetary union. In the first part of the study, we characterize an international fiscal incentive scheme which could reconcile different national macroeconomic preferences, thus supporting an intemational unanimity an monetary policy. The traditionaI argument for fiscal federalism arises from the fact that when countries face asymmetric cyclical fluctuations, pooling of tax revenues may be warranted from the stabilization point of view. Empirical results, presented in the second part of the paper, suggest that the amplitude of asymmetric fluctuations in the GDP is largest in the "fringe" countries of Europe, while the fluctuations in the "core" are more synchronized with pan-European developments.
Persistent Identifier of the first edition: 
ISBN: 
951-686-310-8
Document Type: 
Working Paper

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