I consider the options that governments have in the setting of monetary and fiscal policy with and without adoption of the euro. I argue that some issues, such as the role of ender of last resort, have not yet been satisfactorily addressed by the European Central Bank. But on balance, the...

This paper deals with dynamic adjustment in large economies to changes in the rate of capital income taxation or in the rate of investment tax credit in one country. The framework applied in the paper is a continuous-time, overlapping generations model with two countries. It features population...

The gap between the interest rates of different members of the European Monetary Union (EMU) points out to an imperfect degree of financial integration despite the common currency. This paper develops a two-country New Open Economy Macroeconomics (NOEM) model with imperfect financial integration...

In a Monetary Union where individual monetary instruments are lost, fiscal policy becomes more important as a national policy. The question addressed in this article is whether fiscal policy should be decided at the country level or by a central decision maker, being in any case the fiscal...

The issue of fiscal coordination in a Monetary Union is recurrent as monetary policy can no longer be used as a national stabilization policy instrument. We measure the increase in welfare due to the coordination of fiscal policies in the typical Neo-Keynesian environment, where monetary policy...

The Colombian Economy grew 7,5% in 2007, the highest growth rate since the 1970's. The traditional productive sectors and the great expansion of domestic aggregate demand have been the main sources of growth. However, the major inflationary pressures along the year led to the unfulfillment of...

In this paper, I argue that international policy coordination requires to include both monetary as well as fiscal policy because both sides include policy instruments that allow the strategic manipulation of the country's terms of trade. Hence, the coordination of one part of national...

A consensus has not yet emerged about the relationship between budget deficit, external deficit and national saving. In general, the mechanisms through which budget deficits could cause current account deficits are not highlighted in the works about this theme. Basing on the Post Keynesian...

A consensus has not yet emerged about the relationship between budget deficit, external deficit and national saving. According to mainstream economic literature, the budget deficit can cause an insufficiency of national saving for a given investment rate. In such cases, the investment rate will...