Sometimes two variables Y and Z are each cointegrated with another variable X, but Y and Z do not appear to be cointegrated with each other. This article provides a possible explanation why this might happen.

Sometimes two variables Y and Z are each cointegrated with another variable X, but Y and Z do not appear to be cointegrated with each other. This article provides a possible explanation why this might happen.

In this article we use the concept of information sharing from oligopolistic games to analyse the multilateral surveillance of budget positions introduced with the Stability and Growth Pact. In a game between one monetary authority and various fiscal authorities, we will show that the...