6533b85bfe1ef96bd12bb436
RESEARCH PRODUCT
When do cooperation and commitment matter in a monetary union?
Leopold Von ThaddenLeopold Von ThaddenHubert KempfHubert Kempfsubject
Economics and EconometricsFiscal regimes05 social sciencesMonetary policyMonetary unions[SHS.ECO]Humanities and Social Sciences/Economics and FinanceOutcome (game theory)MicroeconomicsCooperationMonetary policySpillover effectCentral bankCommitmentBenchmark (surveying)0502 economics and businessEconomics050207 economicsFinance050205 econometricsdescription
International audience; This paper offers a framework to study strategic interactions between private players, national fiscal authorities and a common central bank in monetary unions. We establish general conditions, in terms of restrictions on spillover effects of actions by private and public players, under which games that differ in the degree of cooperation and commitment can admit the same equilibrium outcome. We use these conditions to characterize benchmark results on the irrelevance of cooperation and commitment established in recent literature. Moreover, we show for a general setting, in which the benchmark results do not apply, that gains from fiscal cooperation depend on the number of countries and increase as this number gets larger.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2013-11-01 |