This book studies the dynamics of monetary and fiscal interactions in the Euro Area. The policy makers are the European Central Bank and national governments. The primary target of the ECB is low inflation. And the primary target of a national government is low unemployment. However, there is a...

This book is concerned with the long-run effects of budgetary and financial policy on aggregate demand and supply. Here the long run is characterized by the accumulation of public debt and foreign assets. This gives rise to a number of questions. Will the long-run equilibrium be stable? What...

This book studies the coexistence of inflation and unemployment in a monetary union. The focus is on how to reduce the associated loss. The primary target of the European central bank is low inflation in Europe. The primary target of the German government is low unemployment in Germany. And the...

Some Basic Models -- Monetary Policy in Europe -- Fiscal Policy in Germany -- First the Central Bank Decides, then the Governments Decide -- First the Governments Decide, then the Central Bank Decides -- Central Bank and Governments Decide Simultaneously and Independently: Cold-Turkey Policies...