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Élargissement de l'Union monétaire et coordination des politiques budgétaires : un point de vue

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  • Patrick Villieu

Abstract

Is fiscal coordination a necessary complement of EMU Enlargement? Or may enlargement of the Monetary Union be an efficient substitute for fiscal coordination? In a simple monetary-fiscal policy game, Monetary Union enlargement has two opposite effects: 1) Optimal inflation is higher on average, and welfare is lower with decentralized fiscal policy than with centralized fiscal policy. Moreover, when fiscal policies are decentralized, they inefficiently react to supply symmetric shocks, which again reduces welfare. Enlargement of the Monetary Union exacerbates these two problems and increases fiscal coordination benefits. 2) Nevertheless, enlargement of the Monetary Union decreases the fiscal authorities' temptation to resort to "beggar thy neighbor" policies when asymmetric demand shocks arise, and thus may constitute a good substitute for fiscal coordination.

Suggested Citation

  • Patrick Villieu, 2000. "Élargissement de l'Union monétaire et coordination des politiques budgétaires : un point de vue," Annals of Economics and Statistics, GENES, issue 59, pages 137-163.
    • Handle: RePEc:adr:anecst:y:2000:i:59:p:137-163
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    Cited by:

    1. Jérôme Creel, 2001. "Faut-il contraindre la politique budgétaire en Union monétaire ?. Les enseignements d'une maquette simulée," Revue de l'OFCE, Presses de Sciences-Po, vol. 77(2), pages 199-249.
    2. Cornel Oros, 2008. "Macroeconomic stabilization in a heterogeneous monetary union: some insights into the effects of fiscal policy coordination," Economics Bulletin, AccessEcon, vol. 5(34), pages 1-12.
    3. repec:hal:spmain:info:hdl:2441/2943 is not listed on IDEAS
    4. Christophe Schalck, 2007. "Coordination des Politiques Budgétaires dans une Union Monétaire Hétérogène: Modélisation et Application à l'UEM," Working Papers hal-04139250, HAL.
    5. Schalck, Christophe, 2006. "Coordination des Politiques Budgétaires dans une Union Monétaires Hétérogène: Modélisation et Application à l'UEM Coordination of Budgetary Policies in a Heterogeneous Monetary Union: Modelisation and," MPRA Paper 1435, University Library of Munich, Germany.
    6. Cornel Oros, 2009. "Economic Governance in an Asymmetric Monetary Union: A Fiscal Policy Game Analysis," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 39-60.

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