Galí, Jordi; Monacelli, Tommaso - C.E.P.R. Discussion Papers - 2005
for the optimal design of such policies. Monetary policy is conducted by a common central bank, which sets the interest …We lay out a tractable model for fiscal and monetary policy analysis in a currency union, and analyse its implications … monetary policy, coupled with nominal price rigidities, generates a stabilization role for fiscal policy, one beyond the …