Monetary union without fiscal coordination may discipline policymakers

This file is part of IDEAS, which uses RePEc data

Monetary union without fiscal coordination may discipline policymakers

Author Info

Beetsma,Roel M.W.J.
Bovenberg,A. Lans (METEOR)

Additional information is available for the following registered author(s):

Abstract

We show that, with benevolent policymakers and fiscal leadership, monetary unification reduces inflation, taxes and public spending. These disciplining effects of a monetary union, which rise with the number of fiscal players in the union, are likely to raise welfare. Joining an optimally designed monetary union is particularly attractive if fiscal authorities do not care about inflation. Fiscal coordination offsets the disciplining effects of monetary unification. Hence, subsidiarity in fiscal policymaking may enhance welfare. Keywords: monetary union, fiscal leadership, common central bank, discipline, optimal institutions, inflation, taxation, spending, fiscal coordination.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help file. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

Publisher Info
Paper provided by Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization in its series Research Memoranda with number 024.

Download reference. The following formats are available: HTML, plain text, BibTeX, RIS (EndNote), ReDIF
Length:
Date of creation: 1995
Date of revision:
Handle: RePEc:dgr:umamet:1995024

Contact details of provider:
Web page: http://edocs.ub.unimaas.nl/

For technical questions regarding this item, or to correct its listing, contact: (Willy Villevoye).

Other versions of this item:

Article
- Beetsma, Roel M. W. J. & Lans Bovenberg, A., 1998. "Monetary union without fiscal coordination may discipline policymakers," Journal of International Economics, Elsevier, vol. 45(2), pages 239-258, August. [Downloadable!] (restricted)
Paper
- Beetsma, R.M.W.J. & Bovenberg, A.L., 1995. "Monetary Union without Fiscal Coordination May Discipline Policymakers," DELTA Working Papers 95-22, DELTA (Ecole normale supérieure).
- Beetsma, R. & Bovenberg, L., 1995. "Monetary Union without Fiscal Coordination May Discipline Policymakers," Discussion Paper 59, Tilburg University, Center for Economic Research. [Downloadable!]

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Barro, Robert J & Gordon, David B, 1983. "A Positive Theory of Monetary Policy in a Natural Rate Model," Journal of Political Economy, University of Chicago Press, vol. 91(4), pages 589-610, August. [Downloadable!] (restricted)
Other versions:
- Robert J. Barro & David B. Gordon, 1983. "A Positive Theory of Monetary Policy in a Natural-Rate Model," NBER Working Papers 0807, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Beetsma, R.M.W.J. & Bovenberg, A.L., 1995. "Designing Fiscal and Monetary policy Institutions for a European Monetary Union," DELTA Working Papers 95-21, DELTA (Ecole normale supérieure).
Lohmann, Susanne, 1992. "Optimal Commitment in Monetary Policy: Credibility versus Flexibility," American Economic Review, American Economic Association, vol. 82(1), pages 273-86, March. [Downloadable!] (restricted)
Thomas Krichel & Paul Levine & Joseph Pearlman, 1994. "Fiscal and Monetary Policy in a Monetary Union: Credible Inflation Targets or Monetised Debt?," Department of Economics Discussion Papers 9403, Department of Economics, University of Surrey. [Downloadable!]
Other versions:
- Thomas Krichel & Paul Levine & Joseph Pearlman, 1996. "Fiscal and monetary policy in a monetary union: Credible inflation targets or monetized debt?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 127(1), pages 28-54, March. [Downloadable!] (restricted)
Robert J. Barro & David B. Gordon, 1984. "Rules, Discretion and Reputation in a Model of Monetary Policy," NBER Working Papers 1079, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Barro, Robert J. & Gordon, David B., 1983. "Rules, discretion and reputation in a model of monetary policy," Journal of Monetary Economics, Elsevier, vol. 12(1), pages 101-121. [Downloadable!] (restricted)
Alesina, Alberto F & Grilli, Vittorio, 1993. "On the Feasibility of a One- or Multi-Speed European Monetary Union," CEPR Discussion Papers 792, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Other versions:
- Alberto Alesina & Vittorio Grilli, 1993. "On the Feasibility of a One or Multi-Speed European Monetary Union," NBER Working Papers 4350, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Beetsma, R. & Bovenberg, L., 1995. "Designing Fiscal and Monetary Institutions for a European Monetary Union," Discussion Paper 58, Tilburg University, Center for Economic Research. [Downloadable!]
Other versions:
- Beetsma,Roel M.W.J. & Bovenberg,A. Lans, 1996. "Designing fiscal and monetary institutions for a European Monetary Union," Research Memoranda 004, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization. [Downloadable!]
- Beetsma, Roel & Bovenberg, A Lans, 1995. "Designing Fiscal and Monetary Institutions for a European Monetary Union," CEPR Discussion Papers 1303, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Beetsma, Roel M W J & Bovenberg, A Lans, 2000. " Designing Fiscal and Monetary Institutions for a European Monetary Union," Public Choice, Springer, vol. 102(3-4), pages 247-69, March. [Downloadable!] (restricted)
Joshua Aizenman, 1990. "Soft Budget Constraints, Taxes, and the Incentive to Cooperate," NBER Working Papers 3561, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Aizenman, Joshua, 1993. "Soft Budget Constraints, Taxes, and the Incentive to Cooperate," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(4), pages 819-32, November. [Downloadable!] (restricted)
Beetsma, Roel M. W. J. & Lans Bovenberg, A., 1997. "Designing fiscal and monetary institutions in a second-best world," European Journal of Political Economy, Elsevier, vol. 13(1), pages 53-79, February. [Downloadable!] (restricted)
Other versions:
- Beetsma, R.M.W.J. & Bovenberg, A.L., 1995. "Designing Fiscal and Monetary Institutions in a Second-Best World," Discussion Paper 47, Tilburg University, Center for Economic Research. [Downloadable!]
Levine, Paul L & Pearlman, Joseph, 1992. "Fiscal and Monetary Policy Under EMU: Credible Inflation Targets or Unpleasant Monetary Arithmetic?," CEPR Discussion Papers 701, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Guy Debelle & Stanley Fischer, 1994. "How independent should a central bank be?," Working Papers in Applied Economic Theory 94-05, Federal Reserve Bank of San Francisco.
Other versions:
- Guy Debelle & Stanley Fischer, 1994. "How independent should a central bank be?," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, pages 195-225. [Downloadable!]
Levine, Paul, 1993. "Fiscal Policy Co-ordination under EMU and the Choice of Monetary Instrument," The Manchester School of Economic & Social Studies, Blackwell Publishing, vol. 61(0), pages 1-12, Suppl..
Bayoumi, Tamim, 1994. "A Formal Model of Optimum Currency Areas," CEPR Discussion Papers 968, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Other versions:
- Tamim Bayoumi, 1994. "A Formal Model of Optimum Currency Areas," IMF Working Papers 94/42, International Monetary Fund.
Aizenman, Joshua, 1992. "Competitive Externalities and the Optimal Seigniorage," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 24(1), pages 61-71, February. [Downloadable!] (restricted)
Alessandra Casella, 1990. "Participation in a Currency Union," NBER Working Papers 3220, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Casella, Alessandra, 1990. "Participation in a Currency Union," CEPR Discussion Papers 395, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Guy Debelle, 1996. "Central Bank Independence: A Free Lunch?," IMF Working Papers 96/1, International Monetary Fund.

Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.
Statistics
Access and download statistics

Did you know? Over 77% of the top 1000 economists are registered on RePEc.

This page was last updated on 2008-7-30.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.