Fiscal policy mismatch threatens stability of monetary union during crises.
The article explores how the fiscal policies of countries in a monetary union affect its sustainability. It looks at whether countries are meeting fiscal criteria and how this impacts the union, especially during crises. The researchers found that the fiscal criteria set for convergence may not work for all countries equally. They also discovered that when countries experience different economic shocks, being in the union can become more costly due to the inability to adjust monetary policy accordingly.