Galí, Jordi; Monacelli, Tommaso - Department of Economics and Business, Universitat … - 2005
We lay out a tractable model for fiscal and monetary policy analysis in a currency union, and study its implications … rate for the union as a whole. Fiscal policy is implemented at the country level, through the choice of government spending … policy arrangement requires that inflation be stabilized at the union level by the common central bank, while fiscal policy …