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Please use this identifier to cite or link to this item: http://hdl.handle.net/10400.5/2754

Title: Partisan Fiscal Policy in a Monetary Union: Asymmetric Shocks, Delegation and Welfare
Authors: Pina, Álvaro
Keywords: political cycles
monetary union
central bank independence
asymmetric shocks
Issue Date: 2000
Publisher: ISEG – Departamento de Economia
Citation: Pina, Álvaro. 2000. "Partisan Fiscal Policy in a Monetary Union: Asymmetric Shocks, Delegation and Welfare". Instituto Superior de Economia e Gestão - DE Working papers nº 10-2000/DE
Series/Report no.: DE Working papers;nº 10-2000/DE
Abstract: This paper studies the impact of partisan national fiscal policy on the opti¬mal central bank design of a two-country monetary union. In each country two parties with different preferences compete for office, their succession in power being formalized as zero-mean political shocks. These contrast with supply dis¬turbances both because political shocks call for more, rather than less, central bank conservatism and insofar as cross-country shock asymmetry is actually beneficial to welfare. Further, by combining Rogoff-type 'weight-conservatism' with an inflation target it is possible to ensure that monetary delegation always benefits both parties.
URI: http://hdl.handle.net/10400.5/2754
ISSN: 0874-4548
Publisher version: https://aquila1.iseg.utl.pt/aquila/getFile.do?method=getFile&fileId=23811
Appears in Collections:DE - Documentos de trabalho / Working Papers

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