Economics, Econometrics and Finance
4 years ago

Regional fiscal policies impact wages and interest rates in monetary rules.

1 view
RePEc: Research Papers in Economics
Monetary rules and the spillover of regional fiscal policies in a federation
Russell Cooper, Hubert Kempf, Dan Peled

Paper Summary

The article explores how monetary policy rules in a federation like the EU interact with regional fiscal policies. Each country's fiscal decisions affect wages and interest rates when capital markets are connected. Depending on the rule it follows, the central bank can influence the impact of regional fiscal policies.

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