This paper analyses US–European policy interactions under different assumptions about the policy-making regime and the nature of the fiscal environment, contrasting the standard Keynesian case with an anti-Keynesian case in which government spending cuts are expansionary. When fiscal policy is...

This article assesses the rationale for inflation convergence as a major criterion for the passage to the final stage of Economic and Monetary Union (EMU). A simple two-country model is developed to examine the effects of the change in regime under different hypotheses concerning agents'...