This paper investigates the ability of a region participating in a currency union to affect its inflation differential … with respect to the union through fiscal policy. We study the interaction between regional fiscal policy and inflation … region's tax rule that decrease the volatility of its inflation differential also decrease the volatility of its output. The …

Jordan, Turkey and Pakistan over the period 1986–93. The analysis is carried out in two steps. The parameters of agents … negative shock to economic activity in the late 1980s caused agents to discount market fundamentals. For Turkey and Pakistan it …, although this lack of market depth did reduce in severity for Turkey over the sample period, as liberalization of financial …