Designing the Policy Mix in a Monetary Union

26 Pages Posted: 5 Jun 2020

See all articles by Hubert Kempf

Hubert Kempf

Ecole Normale Superieure de Cachan (ENS)

Date Written: 2020

Abstract

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.

Keywords: monetary union, fiscal policy, monetary policy, cooperation, policy mix

JEL Classification: E580, E620, F450, H760

Suggested Citation

Kempf, Hubert, Designing the Policy Mix in a Monetary Union (2020). CESifo Working Paper No. 8321, Available at SSRN: https://ssrn.com/abstract=3618845 or http://dx.doi.org/10.2139/ssrn.3618845

Hubert Kempf (Contact Author)

Ecole Normale Superieure de Cachan (ENS) ( email )

61 avenue du président Wilson
Cachan, Paris 94235
France

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