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Monetary Union: Fiscal Stabilization In The Face of Asymmetric Shocks.

Abstract:

This Paper investigates the importance of fiscal policy in providing macroeconomic stabilisation in a monetary union. We use a microfounded New Keynesian model of a monetary union that incorporates persistence in inflation, and examine non-cooperative interactions of fiscal and monetary authorities. We find that particularly when inflation is persistent, the use of fiscal policy for stabilisation can significantly improve welfare over and above that which arises through the working of automat...

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Authors


Tatiana Kirsanova More by this author
Mathan Satchi More by this author
David Vines More by this author
Volume:
4433
Publication date:
2004
URN:
uuid:23a8cdb7-fcec-4f66-a77b-962465607c8f
Local pid:
oai:economics.ouls.ox.ac.uk:11608
Language:
English

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