How do European monetary and fiscal authorities behave?
The objective of this study is to investigate the behaviour of monetary and fiscal authorities in the Euro area. Our main contribution is joint modelling of behaviour of the two authorities. Our investigation highlights a number of facts. The systematic monetary policies adopted by the non-German authorities in the seventies were not capable of stabilizing inflation. Such results have been achieved in the eigthies and the nineties by anchoring more tightly domestic monetary policy to German monetary policy. All the main episodes of expansionary fiscal policy occurred in the course of the eigthies and the nineties in Europe cannot be explained by the sytematic behaviour of fiscal authorities. Stabilization of inflation has been achieved independently from the lack of fiscal discipline. There are important interactions between the two authorities but they depend exclusively on the responses of governemnts expenditures and receipts to interest rate payments on the public debt. Data on IT spending and investment unambiguously show that the European Union as a whole has eventually caught up with the United States in recent years. Throughout 1992-2001, two thirds of the EU population reached - or came much closer to - the same levels of IT diffusion as the United States. The remaining thirdof the EU citizens clusters together in a group of ´slow IT adopters´ (inclusive of Ireland, Italy, Spain, Portugal and Greece), whose distance from the US and the other EU countries in IT diffusion has evenwidened over time. In spite of this (partial) catching-up in IT diffusion, information technologies have so far delivered limited overall productivity gains in Europe. Thinking of European economies as new economies is thus not appropriate yet.
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Postal: via Rontgen, 1 - 20136 Milano (Italy)|
Web page: http://www.igier.unibocconi.it/
|Order Information:|| Web: http://www.igier.unibocconi.it/en/papers/index.htm Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bernanke, Ben S. & Mihov, Ilian, 1995.
"Measuring Monetary Policy,"
10, Institute for Advanced Studies.
- Richard H. Clarida & Mark Gertler, 1997.
"How the Bundesbank Conducts Monetary Policy,"
in: Reducing Inflation: Motivation and Strategy, pages 363-412
National Bureau of Economic Research, Inc.
- Clarida, R. & Gertler, M., 1996. "How the Bundesbank Conducts Monetary Policy," Working Papers 96-14, C.V. Starr Center for Applied Economics, New York University.
- Richard Clarida & Mark Gertler, 1996. "How the Bundesbank Conducts Monetary Policy," NBER Working Papers 5581, National Bureau of Economic Research, Inc.
- William Poole, 1999.
"Monetary policy rules?,"
Federal Reserve Bank of St. Louis, issue Mar, pages 3-12.
- Clarida, Richard & Gali, Jordi & Gertler, Mark, 1997.
"Monetary Policy Rules in Practice: Some International Evidence,"
97-32, C.V. Starr Center for Applied Economics, New York University.
- Clarida, Richard & Gali, Jordi & Gertler, Mark, 1998. "Monetary policy rules in practice Some international evidence," European Economic Review, Elsevier, vol. 42(6), pages 1033-1067, June.
- Richard Clarida & Jordi Gali & Mark Gertler, 1997. "Monetary Policy Rules in Practice: Some International Evidence," NBER Working Papers 6254, National Bureau of Economic Research, Inc.
- Clarida, Richard & Galí, Jordi & Gertler, Mark, 1997. "Monetary Policy Rules in Practice: Some International Evidence," CEPR Discussion Papers 1750, C.E.P.R. Discussion Papers.
- Taylor, John B., 1993. "Discretion versus policy rules in practice," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 39(1), pages 195-214, December.
- Thomas J. Sargent & Neil Wallace, 1981. "Some unpleasant monetarist arithmetic," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Fall.
- Bernanke, Ben S. & Mihov, Ilian, 1997.
"What does the Bundesbank target?,"
European Economic Review,
Elsevier, vol. 41(6), pages 1025-1053, June.
When requesting a correction, please mention this item's handle: RePEc:igi:igierp:214. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.