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Chocs et règles de politique économique en UEM

Listed author(s):
  • Florence Huart
  • Bas Van Aarle
  • Harry Garretsen

This paper analyzes how monetary and fiscal policy rules can achieve macroeconomic stabilization in a two-country model of an economic and monetary union. Three specific factors play a role in absorbing the effects of macroeconomic shocks: (i) the degree offlexibility ofeconomic-policy rules; (ii) structural asymmetriesbetweencountries; (iii) the nature of inflation expectations. Real and nominal adjustments of national economies are helped by a combination of (i) a Taylor rulewith moderateinterest-rate smoothing and (ii) national fiscal rules thatrely on moderate public-deficit smoothing and let automatic fiscal stabilizers work.

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Article provided by La Documentation Française in its journal Economie & prévision.

Volume (Year): n° 173 (2006)
Issue (Month): 2 ()
Pages: 43-63

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Handle: RePEc:cai:ecoldc:ecop_173_0043
Contact details of provider: Web page: http://www.cairn.info/revue-economie-et-prevision.htm

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