Staying Together or Breaking Apart: Policy-Makers' Endogenous Coalition Formation in the European Economic and Monetary Union

37 Pages Posted: 11 Oct 2002

See all articles by Joseph Plasmans

Joseph Plasmans

University of Antwerp - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); Tilburg University

Giovanni Di Bartolomeo

Sapienza University of Rome, Department of Economics and Law

Jacob C. Engwerda

retiree

Bas Van Aarle

Leuven Centre for Irish Studies LCIS; CESifo (Center for Economic Studies and Ifo Institute); Radboud University Nijmegen - Department of Economics

Date Written: July 2002

Abstract

In this paper, we analyze coordination of macroeconomic stabilization policies within the EMU by focusing, in a dynamic set-up, on asymmetries, externalities, and the existence of a multi-country context. We study how coalitions among fiscal and monetary authorities are formed and what their effects on the stabilization of output and price are. In particular, our attention is directed to studying the consequences on these issues of different institutional contexts in which policy-makers may act. Among other results, we found that, in the presence of externalities, the occurrence of asymmetries is a necessary but not a sufficient condition for cooperation.

Keywords: Macroeconomic Stabilization, EMU, Coalition Formation

JEL Classification: C70, E17, E58, E61, E63

Suggested Citation

Plasmans, Joseph E. J. and Di Bartolomeo, Giovanni and Engwerda, Jacob C. and van Aarle, Bas, Staying Together or Breaking Apart: Policy-Makers' Endogenous Coalition Formation in the European Economic and Monetary Union (July 2002). Available at SSRN: https://ssrn.com/abstract=318689 or http://dx.doi.org/10.2139/ssrn.318689

Joseph E. J. Plasmans (Contact Author)

University of Antwerp - Department of Economics ( email )

Prinsstraat 13
Antwerp, B-2000
Belgium

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Tilburg University

Postbus 90153
Tilburg, DC Noord-Brabant 5000 LE
Netherlands

Giovanni Di Bartolomeo

Sapienza University of Rome, Department of Economics and Law ( email )

via Castro del Laurenziano 9
Roma, IA Rome 00191
Italy

Jacob C. Engwerda

retiree ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 2174 (Phone)
+31 13 466 3280 (Fax)

Bas Van Aarle

Leuven Centre for Irish Studies LCIS ( email )

Janseniusstraat 1
Leuven, 3000
Belgium
+32 16 310433 (Phone)
+32 16 310431 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.cesifo.de

Radboud University Nijmegen - Department of Economics ( email )

P.O.Box 9108
6500 HK Nijmegen
Netherlands
+31 24 3616172 (Phone)
+31 24 3611846 (Fax)

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