What is the Optimal Institutional Arrangement for a Monetary Union?
The aim of this paper is to design the optimal institutional arrangement for a monetary union. Using a two-country rational expectations model, the study analyses how the conservatism of the area-wide central bank and the penalty system for fiscal deviation (Stability and Growth Pact) should be designed with respect to different economic shocks. The optimal institutional arrangement is also dependent on who is the "leader" of the policy game. When national governments move first, the independent area-wide central bank can exercise greater discipline over national fiscal policies, making the Stability Pact unnecessary.
|Date of creation:||Jun 1999|
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- Alberto Franco Pozzolo, 2004.
"Research and Development, Regional Spillovers and the Location of Economic Activities,"
University of Manchester, vol. 72(4), pages 463-482, 07.
- Pozzolo, Alberto Franco, 2003. "Research and Development, Regional Spillovers and the Location of Economic Activities," Economics & Statistics Discussion Papers esdp03008, University of Molise, Dept. EGSeI.
- Alberto Pozzolo, 1998. "Research and Development, Regional Spillovers, and the Location of Economic Activities," Temi di discussione (Economic working papers) 331, Bank of Italy, Economic Research and International Relations Area.
- Pozzolo, A.F., 1998. "Research and Development, Regional Spillovers, and the Location of Economic Activities," Papers 331, Banca Italia - Servizio di Studi.
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