Fiscal Solvency and Price Level Determination in a Monetary Union
Posted: 11 Dec 2001
Abstract
This paper applies the fiscal theory of price level determination to the case of a monetary union. A fiscal perspective suggests, first, that the focus of past studies on seigniorage, per se, may be misplaced. Second, a rise in the level of debt by one member government can raise the common price level throughout the union, suggesting a role for fiscal rules. Third, conditions are discussed under which fiscal solvency is not necessary for each member government in a monetary union.
Keywords: Monetary union, Fiscal theory of the price level, Fiscal rules
JEL Classification: E31, E63, F36
Suggested Citation: Suggested Citation
Bergin, Paul R., Fiscal Solvency and Price Level Determination in a Monetary Union. Available at SSRN: https://ssrn.com/abstract=252348
Feedback
Feedback to SSRN
If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday.