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Dynamische Effekte symmetrischer Nachfrageund Angebotspolitiken in einer asymmetrischen Währungsunion / Dynamic Effects of Symmetric Demand and Supply Side Policies in an Asymmetric Monetary Union

Listed author(s):
  • Wohltmann Hans-Werner

    ()

    (Christian-Albrechts-Universität zu Kiel, Institut für Volkswirtschaftslehre, Olshausenstr. 40, D-24098 Kiel)

  • Clausen Volker

    ()

    (Universität Essen, Fachbereich 5, Internationale Wirtschaftsbeziehungen, Universitätsstr. 12, D-45117 Essen)

The paper analyzes the dynamic effects of anticipated symmetric demand and supply side policies within the framework of a macroeconomic model of a small monetary union, which is characterized by asymmetric wage adjustment equations of Phillips’ curve type. It is shown that an anticipated simultaneous increase in government expenditure in both member countries leads to a short-run fall in output and to temporary divergences in output developments. From the perspective of the country with the lower wage flexibility the output differential is positive in the short-run. In the course of the subsequent adjustment process the relative cyclical position is reversed. The difference between the two member country outputs changes its sign due to changes in the internal and external terms of trade. Similar results hold with a simultaneous reduction of labor extra-costs in both countries. Compared with a symmetric increase in government expenditure the development of the output differential is essentially opposite in sign.

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File URL: https://www.degruyter.com/view/j/jbnst.2002.222.issue-2/jbnst-2002-0205/jbnst-2002-0205.xml?format=INT
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Article provided by De Gruyter in its journal Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik).

Volume (Year): 222 (2002)
Issue (Month): 2 (April)
Pages: 230-257

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Handle: RePEc:jns:jbstat:v:222:y:2002:i:2:p:230-257
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  1. Clausen, Volker & Wohltmann, Hans-Werner, 2005. "Monetary and fiscal policy dynamics in an asymmetric monetary union," Journal of International Money and Finance, Elsevier, vol. 24(1), pages 139-167, February.
  2. Turnovsky,Stephen J., 1977. "Macroeconomic Analysis and Stabilization Policy," Cambridge Books, Cambridge University Press, number 9780521291873, September.
  3. Franz, Wolfgang & Gordon, Robert J., 1993. "German and American wage and price dynamics : Differences and common themes," European Economic Review, Elsevier, vol. 37(4), pages 719-754, May.
  4. Lane, Philip R, 2000. " Asymmetric Shocks and Monetary Policy in a Currency Union," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(4), pages 585-604, December.
  5. Willem H. Buiter & Marcus Miller, 1991. "Real Exchange Rate Overshooting and the Output Cost of Bringing Down Inflation," NBER Chapters,in: International Volatility and Economic Growth: The First Ten Years of The International Seminar on Macroeconomics, pages 239-277 National Bureau of Economic Research, Inc.
  6. Paul De Grauwe, 2000. "Monetary Policies in the Presence of Asymmetries," Journal of Common Market Studies, Wiley Blackwell, vol. 38(4), pages 593-612, November.
  7. Siebert, Horst, 2000. "The Euro: The issues for the future," Kiel Discussion Papers 361, Kiel Institute for the World Economy (IfW).
  8. Dornbusch, Rudiger, 1976. "Expectations and Exchange Rate Dynamics," Journal of Political Economy, University of Chicago Press, vol. 84(6), pages 1161-1176, December.
  9. Devereux, Michael B. & Purvis, Douglas D., 1990. "Fiscal policy and the real exchange rate," European Economic Review, Elsevier, vol. 34(6), pages 1201-1211, September.
  10. Stephen J. Turnovsky, 2000. "Methods of Macroeconomic Dynamics, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262201232, July.
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