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Fiscal Consolidations, but When? Italy and EMU Enlargement

Bohn, Frank (2002) Fiscal Consolidations, but When? Italy and EMU Enlargement. Working Paper. University of Essex, Department of Economics, Economics Discussion Papers, Colchester.


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By using a multi-country simulation model this paper analyses the qualitative effects both of contractionary fiscal policies and of joining a monetary union. It is shown that - under certain macroeconomic conditions - both policy changes should happen at the same time. Given that these conditions exist in prospective future member countries of the European Monetary Union (EMU) it is argued that fiscal consolidations (if required) should not have to be completed prior to joining the EMU. The case of Italy becoming a member of the EMU is used to illustrate this argument.

Item Type: Monograph (Working Paper)
Uncontrolled Keywords: transition to a monetary union, fiscal policy, European Monetary Union; regime change; simulation; MULTIMOD
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Users 161 not found.
Date Deposited: 28 Aug 2014 14:57
Last Modified: 28 Aug 2014 14:57

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