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Monetary and fiscal policies in interaction in monetary unions

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  • Foresti, Pasquale

Abstract

In this paper, the literature on the interaction between monetary and fiscal policies in a monetary union is surveyed. By adopting the concept of symbiosis as a starting point, the paper highlights the importance of uncertainty, policy makers' preferences and targets. Then, the role of commitment to policy rules and coordination is addressed. The analysis also focuses on the importance of the data considered for the generation of the policy mix. As a final step, the paper discusses the main results in the literature on public debt management in a monetary union. All the reported theoretical results are then adopted to retrieve policy and institutional implications for the European Monetary Union.

Suggested Citation

  • Foresti, Pasquale, 2017. "Monetary and fiscal policies in interaction in monetary unions," LSE Research Online Documents on Economics 69623, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:69623
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    File URL: http://eprints.lse.ac.uk/69623/
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    More about this item

    Keywords

    economic shocks; EMU; monetary and fiscal policies interaction; monetary union; policy mix;

    JEL classification:

    • F3 - International Economics - - International Finance
    • G3 - Financial Economics - - Corporate Finance and Governance

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