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Macroeconomic Policy Interaction under EMU: A Dynamic Game Approach

  • Bas Van Aarle
  • Jacob Engwerda

    ()

  • Joseph Plasmans
  • Arie Weeren

In this article, we study macroeconomic stabilization in the Economic and Monetary Union (EMU) using a dynamic game approach. With the aid of a stylized macroeconomic model, this article analyzes the transmission and interaction of national fiscal policies and monetary policy of the European Central Bank (ECB) in the EMU. A special focus is on the effects of labor market institutions in the participating countries and of the introduction of fiscal stringency criteria like those imposed in the Stability and Growth Pact. Copyright Kluwer Academic Publishers 2001

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File URL: http://hdl.handle.net/10.1023/A:1026507026304
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Article provided by Springer in its journal Open Economies Review.

Volume (Year): 12 (2001)
Issue (Month): 1 (January)
Pages: 29-60

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Handle: RePEc:kap:openec:v:12:y:2001:i:1:p:29-60
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  7. Engwerda, J.C. & van Aarle, B. & Plasmans, J.E.J., 1998. "Fiscal Policy Interaction in the EMU," Discussion Paper 1998-113, Tilburg University, Center for Economic Research.
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  15. Demertzis, Maria & Hughes Hallett, Andrew & Viegi, Nicola, 2004. "An independent central bank faced with elected governments," European Journal of Political Economy, Elsevier, vol. 20(4), pages 907-922, November.
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