We consider a model where there exists an uncertainty on whether economic policy has an effect or not. There are two potential policymakers, one being more ?sceptical? about the existence of this effect. Among these two policymakers, which one does society prefer? The paper underlines that the...

In a two-country model where the policy-mix in response to symmetric shocks is considered, we analyze the effect of the coordination of fiscal policies between countries in a monetary union and under a flexible exchange rate. It is shown that results can be very different depending on what is...

In an open economy model in which the price of financial assets (equities) is introduced, we consider the issue of whether, and how, the Central Bank should react to the exchange rate and to the price of equities. A fixed exchange rate regime is then considered and its potentially harmful effect...