Wage Rigidity and Monetary Union
In: The economic journal: the journal of the Royal Economic Society, Band 115, Heft 506, S. 907-927
ISSN: 1468-0297
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In: The economic journal: the journal of the Royal Economic Society, Band 115, Heft 506, S. 907-927
ISSN: 1468-0297
In: The Impact of EMU on Europe and the Developing Countries, S. 17-39
In: IMF Working Paper WP/14/201
In: IMF Working Papers v.Working Paper No. 14/201
Using a DSGE model calibrated to the euro area, we analyze the international effects of afiscal devaluation (FD) implemented as a revenue-neutral shift from employer's socialcontributions to the Value Added Tax. We find that a FD in 'Southern European countries'has a strong positive effect on output, but mild effects on the trade balance and the realexchange rate. Since the benefits of a FD are small relative to the divergence incompetitiveness, it is best addressed through structural reforms
In: Monitoring European Integration, 1991
In: A CEPR Annual Report
World Affairs Online
In: Policy analyses in international economics 49
World Affairs Online
We use a two-country model with a central bank maximizing union-wide welfare and two fiscal authorities minimizing comparable, but slightly different country-wide losses. We analyze the rivalry between the three authorities in seven static games. Comparing a homogeneous with a heterogeneous monetary union, we find welfare losses to be significantly larger in the heterogeneous union. The best-performing scenarios are cooperation between all authorities and monetary leadership. Cooperation between the fiscal authorities is harmful to both the whole union's and the country-specific welfare.
BASE
In: IMF Staff Country Reports
KEY ISSUESContext. The region continued to experience a strong upswing in 2013 and the immediate outlook is for further vigorous growth and moderate inflation. Sustaining this performance over the medium term, however, will require ambitious growth-enhancing reforms, high quality public investment, and consolidation of the recent improvements in the regional political and security situation. The outlook is subject to moderate downside risks. In the short term, political stability could be tested with the upcoming elections in a number of member states, particularly in a context of high demand
World Affairs Online
In: American economic review, Band 104, Heft 5, S. 101-106
ISSN: 1944-7981
We propose a continuous time model to investigate the impact of inflation credibility on sovereign debt dynamics. At every point in time, an impatient government decides fiscal surplus and inflation, without commitment. Inflation is costly, but reduces the real value of outstanding nominal debt. In equilibrium, debt dynamics is the result of two opposing forces: (i) impatience and (ii) the desire to conquer low inflation. A large increase in inflation credibility can trigger a process of debt accumulation. This rationalizes the sovereign debt booms that are often experienced by low inflation credibility countries upon joining a currency union.
We use a two-country model with a central bank maximizing union-wide welfare and two fiscal authorities minimizing comparable, but slightly different country-wide losses. We analyze the rivalry between the three authorities in seven static games. Comparing a homogeneous with a heterogeneous monetary union, we find welfare losses to be significantly larger in the heterogeneous union. The best-performing scenarios are cooperation between all authorities and monetary leadership. Cooperation between the fiscal authorities is harmful to both the whole union's and the country-specific welfare.
BASE
In: Discussion paper series 4122
In: International macroeconomics
In: Journal of policy modeling: JPMOD ; a social science forum of world issues, Band 27, Heft 4, S. 509-523
ISSN: 0161-8938
In: NBER Working Paper No. w20277
SSRN
Working paper
In: Advances in Computational Economics; Quantitative Economic Policy, S. 275-291