Citation

Discussion Paper Details

Please find the details for DP5533 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Optimal Fiscal Policy Rules in a Monetary Union

Author(s): Tatiana Kirsanova, Mathan Satchi, David Vines and Simon Wren-Lewis

Publication Date: March 2006

Keyword(s): monetary union, optimal monetary policy and fiscal policies and simple rules

Programme Area(s): International Macroeconomics

Abstract: This paper investigates the importance of fiscal policy in providing macroeconomic stabilisation in a monetary union. We use a microfounded New Keynesian model of a monetary union which incorporates persistence in inflation and non-Ricardian consumers, and derive optimal simple rules for fiscal authorities. We find that fiscal policy can play an important role in reacting to inflation and output, but that not much is lost if national fiscal policy is restricted to react only to national differences in inflation and output.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=5533

Bibliographic Reference

Kirsanova, T, Satchi, M, Vines, D and Wren-Lewis, S. 2006. 'Optimal Fiscal Policy Rules in a Monetary Union'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=5533