IDEAS home Printed from https://ideas.repec.org/h/spr/dymchp/978-3-319-39120-5_12.html
   My bibliography  Save this book chapter

Fiscal and Monetary Policies in a Monetary Union: Conflict or Cooperation?

In: Dynamic Perspectives on Managerial Decision Making

Author

Listed:
  • Dmitri Blueschke

    (Alpen-Adria Universität Klagenfurt)

  • Reinhard Neck

    (Alpen-Adria Universität Klagenfurt)

Abstract

In this paper we present an application of the dynamic tracking games framework to a monetary union. We use a small stylized nonlinear two-country macroeconomic model (MUMOD1) of a monetary union to analyse the interactions between fiscal (governments) and monetary (common central bank) policy makers, assuming different objective functions of these decision makers. Using the OPTGAME algorithm we calculate solutions for two game strategies: a cooperative solution (Pareto optimal) and a non-cooperative equilibrium solution (the Nash game for the feedback information pattern). We show how the policy makers react to demand shocks under non-cooperation and cooperation scenarios. The cooperative solution dominates the non-cooperative solution in all scenarios, which may be interpreted as an argument for coordinating fiscal and monetary policies in a monetary union in a situation of high public debt such as in the recent sovereign debt crisis in Europe.

Suggested Citation

  • Dmitri Blueschke & Reinhard Neck, 2016. "Fiscal and Monetary Policies in a Monetary Union: Conflict or Cooperation?," Dynamic Modeling and Econometrics in Economics and Finance, in: Herbert Dawid & Karl F. Doerner & Gustav Feichtinger & Peter M. Kort & Andrea Seidl (ed.), Dynamic Perspectives on Managerial Decision Making, pages 201-216, Springer.
    • Handle: RePEc:spr:dymchp:978-3-319-39120-5_12
    DOI: 10.1007/978-3-319-39120-5_12
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:dymchp:978-3-319-39120-5_12. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.