Arbeitspapier
Sustainable Price Stability Policies in a Currency Area with Free-Riding Fiscal Policies
Autoren
Erscheinungsdatum
• A game of strategic interaction among
policy makers in a currency area
a) Single monetary authority and several
fiscal authorities
b) An infinite horizon micro-founded
multiple country model
• Nominal government bonds → temptations
to monetize debt (inflationary bias)
• Liquidity constraints → welfare costs
of inflation (equally shared among area
members)
• Sequential policy moves →government
expenditure bias
