Is a unified macroeconomic policy necessarily better for a common currency area?

It is widely assumed that a common currency makes it desirable to have also a common fiscal policy. However, if fiscal policy is a source of shocks, independent national fiscal policies are generally preferable because they allow risk diversification.

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Year of publication:	2009
Authors:	Belke, Ansgar ; Gros, Daniel
Published in:	European Journal of Political Economy. - Elsevier, ISSN 0176-2680. - Vol. 25.2009, 1, p. 98-101
Publisher:	Elsevier
Keywords:	Currency union Fiscal policy coordination Stabilisation

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005311202