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Fiscal policy coordination in the EMU

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  • Ferré, Montserrat

Abstract

The objective of this article is to compare the outcomes of fiscal coordination under a narrow and a broad agenda in the European Monetary Union (EMU). The EMU (narrow) approach to fiscal coordination will lead to higher volatility of interest rates, output, inflation and average budget deficits than broad coordination. Further, fiscal authorities will prefer a broad type of coordination, although there will be incentives to deviate. Hence, to promote broad coordination in a monetary union like the EMU clear rules indicating how to operate and an effective forum to encourage dialogue should be put into place.

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  • Ferré, Montserrat, 2008. "Fiscal policy coordination in the EMU," Journal of Policy Modeling, Elsevier, vol. 30(2), pages 221-235.
    • Handle: RePEc:eee:jpolmo:v:30:y:2008:i:2:p:221-235
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    Cited by:

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    6. Onorante, Luca & Pedregal, Diego J. & Pérez, Javier J. & Signorini, Sara, 2010. "The usefulness of infra-annual government cash budgetary data for fiscal forecasting in the euro area," Journal of Policy Modeling, Elsevier, vol. 32(1), pages 98-119, January.
    7. Claudiu T. Albulescu & Cornel Oros, 2014. "The policy-mix in the Euro Area: The Role of Financial Stability," Economics Bulletin, AccessEcon, vol. 34(2), pages 705-717.
    8. Anelí Bongers & Carmen Díaz-Roldán, 2019. "Stabilization Policies and Technological Shocks: Towards a Sustainable Economic Growth Path," Sustainability, MDPI, vol. 11(1), pages 1-19, January.
    9. Crespo-Cuaresma, Jesús & Fernández-Amador, Octavio, 2013. "Business cycle convergence in EMU: A second look at the second moment," Journal of International Money and Finance, Elsevier, vol. 37(C), pages 239-259.
    10. Bonatti, Luigi & Cristini, Annalisa, 2008. "Breaking the Stability Pact: Was it predictable?," Journal of Policy Modeling, Elsevier, vol. 30(5), pages 793-810.
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    12. Chortareas, Georgios & Mavrodimitrakis, Christos, 2021. "Policy conflict, coordination, and leadership in a monetary union under imperfect instrument substitutability," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 342-361.
    13. Muhammad Ali Nasir & Junjie Wu & Milton Yago & Alaa M. Soliman, 2016. "Macroeconomic policy interaction: State dependency and implications for financial stability in UK: A systemic review," Cogent Business & Management, Taylor & Francis Journals, vol. 3(1), pages 1154283-115, December.
    14. Zongsen Zou & Xiuling Wang & Dengtian Feng, 2020. "Adhere to the rules or be discretionary? Empirical evidence from the euro area," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 15(2), pages 501-525, April.
    15. Trachanas, Emmanouil & Katrakilidis, Constantinos, 2013. "Fiscal deficits under financial pressure and insolvency: Evidence for Italy, Greece and Spain," Journal of Policy Modeling, Elsevier, vol. 35(5), pages 730-749.
    16. Hughes Hallett, Andrew & Mavrodimitrakis, Christos, 2019. "Cooperation vs. leadership in a core-periphery monetary union: Inter-country vs. inter-institutional policy coordination," Journal of Macroeconomics, Elsevier, vol. 59(C), pages 103-122.
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