Designing the Policy Mix in a Monetary Union
CESifo, Munich, 2020
CESifo Working Paper No. 8321
This paper studies the design of the policy mix in a monetary union, that is, the institutional arrangement specifying the relationships between the various policymakers present in the union and the extent of their capacity of action. It is assumed that policymakers do not cooperate. Detailing several institutional variants imposed on an otherwise standard macromodel of a monetary union, we prove that there is no Pareto-superior design when cooperation between policymakers is impossible.
Fiscal Policy, Macroeconomics and Growth
Monetary Policy and International Finance