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Intro -- Preface -- Contents -- 1. Introduction -- 2. Short-Run Equilibrium -- 3. Long-Run Equilibrium -- 3.1. Long-Run Equilibrium -- 3.2. Process of Adjustment -- 3.3. Simulation -- 3.4. Public Consumption in Utility Function -- 4. Process of Adjustment -- 4.1. Short-Run Equilibrium -- 4.2. Medium-Run Equilibrium -- 4.3. Long-Run Equilibrium -- 4.4. Process of Adjustment -- 4.5. AD-AS Diagram -- 5. Investment Shock and Cyclical Adjustment -- 5.1. Economy Without Public Sector -- 5.1.1. Overlapping Generations Model -- 5.1.2. Multiplier-Accelerator Model -- 5.1.3. Simulation -- 5.2. Economy With Public Sector -- 5.2.1. Overlapping Generations Model -- 5.2.2. Multiplier-Accelerator Model -- 5.2.3. Simulation -- 5.3. Economy With Fiscal Policy -- 5.3.1. Overlapping Generations Model -- 5.3.2. Multiplier-Accelerator Model -- 5.3.3. Simulation -- 5.4. Alternative Paths -- 5.4.1. Stability -- 5.4.2. Damped Oscillations -- 5.4.3. Explosive Oscillations -- 6. Investment Shock, Public Interest and Cyclical Adjustment -- 6.1. Economy With Public Sector -- 6.1.1. Overlapping Generations Model -- 6.1.2. Multiplier-Accelerator Model -- 6.1.3. Simulation -- 6.2. Economy With Fiscal Policy -- 6.2.1. Overlapping Generations Model -- 6.2.2. Multiplier-Accelerator Model -- 6.2.3. Simulation -- 6.2.4. Restoring Stability -- 6.3. Stability -- 7. Extensions -- 7.1. The Concept of Full Employment -- 7.2. Investment Shock -- 7.2.1. Money Finance of Budget Deficit -- 7.2.2. Investment Subsidy -- 7.2.3. Monetary Policy -- 7.3. Monetary Shock -- 7.3.1. Process of Adjustment -- 7.3.2. Fiscal Policy -- 7.3.3. Monetary Policy -- 7.4. Growing Economy -- 7.4.1. Fiscal Policy -- 7.4.2. Optimum Fiscal Policy -- 8. Conclusion -- 9. Result -- List of Symbols -- References -- Index.

This book studies the dynamics of monetary and fiscal interactions in the Euro Area. The policy makers are the European Central Bank and national governments. The primary target of the ECB is low inflation. And the primary target of a national government is low unemployment. However, there is a short-run trade-off between low inflation and low unemployment. Here the main focus is on sequential policy decisions. Another focus is on simultaneous and independent policy decisions. And a third focus is on policy cooperation. There are demand shocks, supply shocks, and mixed shocks. There are country-specific shocks and common shocks. The key question is: Given a shock, what are the dynamic characteristics of the resulting process?

"This book studies the strategic interactions between monetary and fiscal policies in the world economy. The world economy consists of two regions, say Europe and America. The policy makers are the central banks and the governments. The policy targets are low inflation, low unemployment, and low structural deficits. There are demand shocks, supply shocks, and mixed shocks. There are regional shocks and common shocks. This book develops a series of basic, intermediate, and more advanced models. Here the focus is on the Nash equilibrium. The key questions are: Given a shock, can policy interactions reduce the existing loss? And to what extent can they do so? Another topical issue is policy cooperation. To illustrate all of this there are a lot of numerical examples."--Jacket

This book studies the strategic policy interactions in a monetary union. The leading protagonists are the European Central Bank and national governments. The target of the ECB is low inflation in Europe. The targets of a national government are low unemployment and a low structural deficit. There are demand shocks, supply shocks, and mixed shocks. There are country-specific shocks and common shocks. This book develops a series of basic, intermediate, and more advanced models. Here the focus is on the Nash equilibrium. The key questions are: Given a shock, can policy interactions reduce the existing loss? And to what extent can they do so? Another topical issue is policy cooperation. To illustrate all of this there are a lot of numerical examples.

Studies the interactions between monetary and wage policies in the euro area. This book discusses the process of policy competition and the structure of policy cooperation. It also features numerical simulations of policy competition and numerical solutions to policy cooperation

"This book, unlike other books, provides readers with a practical yet sophisticated grasp of the macroeconomic principles necessary to understand a monetary union. By definition, a monetary union is a group of countries that share a common currency. The most important case in point is the Euro area. Policy makers are the central bank, national governments, and national labour unions. Policy targets are price stability and full employment. Policy makers follow cold-turkey or gradualist strategies. Policy decisions are taken sequentially or simultaneously. The countries can differ in size or behaviour. Policy expectations are adaptive or rational. To illustrate all of this there are numerical simulations of monetary policy, fiscal policy, and wage policy."--Jacket

This book studies the international coordination of monetary and fiscal policies in the world economy. It carefully discusses the process of policy competition and the structure of policy cooperation. As to policy competition, the focus is on monetary and fiscal competition between Europe and America. Similarly, as to policy cooperation, the focus is on monetary and fiscal cooperation between Europe and America. The spillover effects of monetary policy are negative while the spillover effects of fiscal policy are positive. The policy targets are price stability and full employment. The policy makers follow either cold-turkey or gradualist strategies. Policy expectations are adaptive or rational. The world economy consists of two, three or more regions. TOC:Part One. The World of Two Monetary Regions: Basic Models.- Part Two. The World of Two Monetary Regions: Intermediate Models.- Part Three. The World of Two Monetary Regions: Advanced Models.- Part Four. The World of Three Monetary Regions.- Part Five. The World of N Monetary Regions.- Part Six. Rational Policy Expectations

This book studies the international coordination of monetary and fiscal policies in the world economy. It carefully discusses the process of policy competition and the structure of policy cooperation. As to policy competition, the focus is on monetary and fiscal competition between Europe and America. Similarly, as to policy cooperation, the focus is on monetary and fiscal cooperation between Europe and America. The spillover effects of monetary policy are negative while the spillover effects of fiscal policy are positive. The policy targets are price stability and full employment. The policy makers follow either cold-turkey or gradualist strategies. Policy expectations are adaptive or rational. The world economy consists of two, three or more regions.