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DP1547 Out in the Sunshine? Outsiders, Insiders, and the United States in 1998

Author(s): Fabio Ghironi , Francesco Giavazzi
Publication Date: January 1997
Keyword(s): European Monetary Union , International Policy Coordination
JEL(s): F31 , F33 , F41 , F42
Programme Areas: International Macroeconomics
Link to this Page: www.cepr.org/pubs/dps/DP1547.asp


The paper analyses monetary and fiscal policy interactions in a three-country world, interpreted to represent two EU economies and the rest of the world. The analysis extends well-known results in the literature on international policy spillovers by investigating the effects of different sizes of the two EU economies. A set of general results is derived, which allows a reinterpretation of earlier findings in the literature on policy-making in interdependent economies.

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