ISBN: 3540298002
TITLE: Monetary and Fiscal Policies in the Euro Area
AUTHOR: Carlberg
TOC:

Introduction 1
l. Subject and Approach 1
2. Monetary Competition between Europe and America 2
3. Monetary Cooperation between Europe and America 5
4. Fiscal Competition between Germany and France 5
5. Fiscal Cooperation between Germany and France 7
6. Monetary and Fiscal Competition 8
7. Monetary and Fiscal Cooperation 9
Part One. Basic Models of a Monetary Union 11
Chapter 1. The Small Monetary Union of Two Countries 13 
1. Introduction 13
2. The Market for German Goods 13
3. The Market for French Goods 14
4. The Money Market of the Union 15
5. The Model 16
6. The Total Differential 16
7. Fiscal Policy 18
8. Monetary Policy 19
Chapter 2. The World as a Whole 20
Chapter 3. The World of Two Monetary Regions 24
1. Introduction 24
2. The Market for European Goods 24
3. The Market for American Goods 25
4. The European Money Market 26
5. The American Money Market 26
6. The Model 27
7. The Total Differential 27
8. Fiscal Policy 29
9. Monetary Policy 31
Chapter 4. The Large Monetary Union of Two Countries 33
1. Introduction 33
2. The Market for German Goods 34
3. The Market for French Goods 35
4. The Market for American Goods 36
5. The European Money Market 37
6. The American Money Market 37
7. The Model 37
8. The Total Differential 38
9. Fiscal Policy 40
Part Two. Monetary Interactions between Europe and America 43
Chapter 1. Monetary Competition between Europe and America 45
1. The Dynamic Model 45
2. Some Numerical Examples 53
2.1. The Case of Unemployment 54
2.2. Europe and America Differ in Unemployment 57
2.3. The Case of Inflation 59
2.4. Unemployment in Europe, Inflation in America 61
3. Alternative Targets of the European Central Bank 64
4. The Anticipation of Policy Spillovers 68
Chapter 2. Monetary Cooperation between Europe and America 71
1. The Model 71
2. Some Numerical Examples 74
3. Alternative Targets of the European Central Bank 79
Part Three. Fiscal Interactions between Germany and France 83
Chapter 1. Fiscal Competition between Germany and France 85
1. The Dynamic Model 85
2. Some Numerical Examples 92
2.1. Unemployment in Germany and France 93
2.2. Unemployment in Germany, Overemployment in France 96
Chapter 2. Fiscal Cooperation between Germany and France 99
1. The Model 99
2. Some Numerical Examples 101
Part Four. Monetary and Fiscal Interactions: Intermediate Models 
105
Chapter 1. Competition between European Central Bank, German Government, and French Government 107
1. The Dynamic Model 107
2. Some Numerical Examples 109
2.1. Unemployment in Europe, Full Employment in America 110
2.2. Inflation in Europe, Price Stability in America 113
2.3. First the Governments Decide, then the Central Bank Decides 115
Chapter 2. Cooperation between European Central Bank, German Government, and French Government 120
1. The Model 120
2. Some Numerical Examples 122
2.1. Unemployment in Europe, Full Employment in America 122
2.2. Inflation in Europe, Price Stability in America 124
2.3. Alternative Targets of Policy Cooperation 124
Chapter 3. Competition between European Central Bank, American Central Bank,  German Government, and French Government 127
1. The Dynamic Model 127
2. Some Numerical Examples 129
2.1. The Case of Unemployment 130
2.2. Europe and America Differ in Unemployment 133
Chapter 4. Cooperation between European Central Bank, American Central Bank, German Government, and French Government 137
1. The Model 137
2. Some Numerical Examples 140
2.1. The Case of Unemployment 140
2.2. Europe and America Differ in Unemployment 142
2.3. The Case of Inflation 143
2.4. Unemployment in Europe, Inflation in America 144
2.5. Alternative Targets of Policy Cooperation 145
Part Five. Monetary and Fiscal Interactions: Advanced Models 147
Chapter 1. Cold-Turkey Policies: Simultaneous Decisions 149
Chapter 2. Gradualist Policies: Simultaneous Decisions 155
Chapter 3. Fast Monetary Competition and Slow Fiscal Competition 161
Chapter 4. Monetary Cooperation between Europe and America, Fiscal Competition between Germany and France 165
1. The Model 165
2. Some Numerical Examples 166
2.1. The Case of Unemployment 167
2.2. The Case of Inflation 170
2.3. Unemployment in Europe, Inflation in America 172
Chapter 5. Monetary Cooperation between Europe and America, Fiscal Cooperation between Germany and France 175
1. The Model 175 2. Some Numerical Examples 177
2.1. The Case of Unemployment 178
2.2. The Case of Inflation 180
2.3. Unemployment in Europe, Inflation in America 182
Chapter 6. Policy Cooperation within Europe, Policy Competition between Europe and America 184
1. The Model 184
2. A Numerical Example 186
Part Six. Rational Policy Expectations 191
Chapter 1. Monetary Competition between Europe and America 193
Chapter 2. Fiscal Competition between Germany and France 198
Chapter 3. Monetary and Fiscal Competition:  Sequential Decisions 203
Chapter 4. Monetary and Fiscal Competition: Simultaneous Decisions 212
Chapter 5. Monetary Cooperation between Europe and America, Fiscal Competition between Germany and France 214
Chapter 6. Policy Cooperation within Europe, Policy Competition between Europe and America 219
Synopsis 227
Conclusion 231
1. Monetary Competition between Europe and America 231
2. Monetary Cooperation between Europe and America 236
3. Fiscal Competition between Germany and France 238
4. Fiscal Cooperation between Germany and France 241
5. Monetary and Fiscal Competition: Cold-Turkey Policies 243
6. Monetary and Fiscal Competition: Gradualist Policies 247
7. Monetary and Fiscal Cooperation 248
8. Monetary Cooperation and Fiscal Competition 250
9. Monetary Cooperation and Fiscal Cooperation 253
10. Rational Policy Expectations 256
Result 259
1. Monetary Competition between Europe and America 259
2. Monetary Cooperation between Europe and America 261
3. Fiscal Competition between Germany and France 262
4. Fiscal Cooperation between Germany and France 263
5. Monetary and Fiscal Competition 264
6. Monetary and Fiscal Cooperation 266
Symbols 267
A Brief Survey of the Literature 269
The Current Research Project 272
References 275
Index 287
END
