The aim remains: Monetary union

Monetary Union Its Costs

monetary :union: its costs

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Challenges for Monetary Policy in the European Monetary Union

The financial crisis has brought the “monetary policy consensus” formed in the years prior to the crisis under scrutiny (Bean et al., 2010). The framework of monetary policy differed significantly from one central bank to another. Never theless, across the board their primary objective was price stability—defined as a stabilization of the inflation rate at around 2 percent across a horizon of a...

Monetary and Fiscal Policy in the European Monetary Union

The introductory phase of the European Monetary Union (EMU) ended with the introduction of the euro currency in 2002. We present a review of the experiences with the new monetary union. Using a Taylor rule, we analyze the conduct of monetary policy by the European Central Bank (ECB). The empirical results suggest that the ECB applies similar weights to inflation and the output gap as the Bundes...

Monetary Union and Fiscal Federalism

Does a monetary union need fiscal shock absorbers helping the participating countries to cope with asymmetric shocks? The consensus in the debate over EMU argues that the answer is yes. In this paper, we revisit the issue, building on a dynamic, general equilibrium framework of regions in a monetary union exposed to asymmetric shocks. We show that inter-regional taxes and transfers can stabiliz...