Utilize este identificador para referenciar este registo: http://hdl.handle.net/10400.22/623
Título: Stabilization constraints from different-average public debt levels in a Monetary Union with country-size asymmetry
Autor: Machado, Celsa Maria de Carvalho
Ribeiro, Ana Paula
Palavras-chave: Asymmetric countries
Monetary union
Optimal fiscal and monetary policies
Data: 2011
Editora: Instituto Politécnico do Porto. Instituto Superior de Contabilidade e Administração do Porto
Resumo: In the sequence of the recent financial and economic crisis, the recent public debt accumulation is expected to hamper considerably business cycle stabilization, by enlarging the budgetary consequences of the shocks. This paper analyses how the average level of public debt in a monetary union shapes optimal discretionary fiscal and monetary stabilization policies and affects stabilization welfare. We use a two-country micro-founded New-Keynesian model, where a benevolent central bank and the fiscal authorities play discretionary policy games under different union-average debt-constrained scenarios. We find that high debt levels shift monetary policy assignment from inflation to debt stabilization, making cooperation welfare superior to noncooperation. Moreover, when average debt is too high, welfare moves directly (inversely) with debt-to-output ratios for the union and the large country (small country) under cooperation. However, under non-cooperation, higher average debt levels benefit only the large country.
URI: http://hdl.handle.net/10400.22/623
Aparece nas colecções:ISCAP - Economia - Comunicações em eventos científicos

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