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Is Fiscal Policy Coordination Needed in a Common Currency Area?

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Author Info
Ansgar Belke ()
Daniel Gros

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Abstract

It is widely assumed that a common currency makes it desirable to have also a common fiscal policy. However, if fiscal policy is a source of shocks, independent national fiscal policies are generally preferable because they allow for risk diversification.

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File URL: http://repec.rwi-essen.de/files/REP_08_062.pdf
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Publisher Info
Paper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen in its series Ruhr Economic Papers with number 0062.

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Length: 15 pages
Date of creation: Aug 2008
Date of revision:
Handle: RePEc:rwi:repape:0062

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Related research
Keywords: Currency union; fiscal policy coordination; stabilisation;

Find related papers by JEL classification:
E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization
F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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This page was last updated on 2009-11-17.

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