Stabilization Policy in an Exchange Rate Union
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Stabilization Policy in an Exchange Rate Union: Transmission, Coordination and Influence on the Union Cohesion(Contributions to Economics)

Stabilization Policy in an Exchange Rate Union: Transmission, Coordination and Influence on the Union Cohesion(Contributions to Economics)


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About the Book

This study analyzes the impact of monetary and fiscal policy pursued by one member country of an exchange rate union on its own macroeconomic performance, as well as on those of the other member countries and of the rest of the world. Since the analytical framework is defined by a three-country model, many results from the traditional policy co-ordination literature, which relies on two-country models, are qualified. Particular attention is paid to the implications of asymmetries between the EC member countries. Furthermore, the structural parameters are in some instances not taken as given, but as responsive to the unification process. The study is a reference concerning the theoretical analysis of currency unions. It should also be of interest for those concerned with European integration.

Table of Contents:
I: The State of the Art.- 1. The optimality criteria.- 2. Conditions for existence of a monetary union.- 3. The change in structural parameters.- 4. The underlying models.- 5. The game theoretical approach.- Conclusions.- II: An IS-LM-AS Model for a “Small” Exchange Rate Union.- 1. The model.- 2. The efficacy of monetary policy.- 3. The efficacy of fiscal policy.- 4. The model, the change in structural parameters and the optimality and existence conditions issues.- Conclusions.- III: Monetary and Fiscal Policy in a “Small” Exchange Rate Union — a Strategic Analysis.- 1. Monetary policy: the system of interdependence and the authorities’ utility functions.- 2. Monetary policy: the Nash, cooperative, Stackelberg and monetary union solutions.- 3. Concluding remarks on monetary policy coordination.- 4. Fiscal policy: the system of interdependence and the authorities’ utility functions.- 5. Fiscal policy: the Nash, cooperative and Stackelberg solutions.- 6. Concluding remarks on fiscal policy coordination.- IV: An IS-LM-AS Model for a “Big” Exchange Rate Union.- 1. The model and its formal representation.- 2. Symmetry assumptions and other simplifications introduced for computational reasons.- 3. The efficacy of monetary policy: the short run.- 4. The efficacy of monetary policy: the medium run.- 5. The efficacy of monetary policy: the long run.- 6. The efficacy of monetary policy: the case of fixed exchange rates between the union and the rest of the world.- 7. The efficacy of fiscal policy: the short run.- 8. The efficacy of fiscal policy: the medium run.- 9. The efficacy of fiscal policy: the long run.- 10. The efficacy of fiscal policy: the case of fixed exchange rates towards the rest of the world.- Conclusions.- V: Monetary and Fiscal Policy in a“Big” Exchange Rate Union — a Strategic Analysis.- 1. Monetary policy: the system of interdependence and the authorities’ utility functions.- 2. Monetary policy: the Nash, cooperative and Stackelberg solutions.- 3. Conclusions on monetary policy.- 4. Fiscal policy: the system of interdependence and the authorities’ utility functions.- 5. Fiscal policy: the Nash, cooperative and Stackelberg solutions.- 6. Conclusions on fiscal policy.- Conclusions.


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Product Details
  • ISBN-13: 9783790807899
  • Publisher: Springer-Verlag Berlin and Heidelberg GmbH & Co. KG
  • Publisher Imprint: Physica-Verlag GmbH & Co
  • Height: 235 mm
  • No of Pages: 174
  • Series Title: Contributions to Economics
  • Width: 155 mm
  • ISBN-10: 3790807893
  • Publisher Date: 30 Aug 1994
  • Binding: Paperback
  • Language: English
  • Returnable: N
  • Sub Title: Transmission, Coordination and Influence on the Union Cohesion


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Stabilization Policy in an Exchange Rate Union: Transmission, Coordination and Influence on the Union Cohesion(Contributions to Economics)
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