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...

The Stability and Growth Pact (SGP) aims at reducing the deficit bias and inducing fiscal policy co-ordination in EMU. This article shows that, under positive (demand or supply) shocks, average deficits and interest rates with fiscal co-ordination can be higher than without co-ordination, thus...