On the Desirability of Fiscal Constraints in a Monetary Union / V.V. Chari, Patrick J. Kehoe.

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Chari, V.V

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TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w10232.Publication details: Cambridge, Mass. National Bureau of Economic Research 2004.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: The desirability of fiscal constraints in monetary unions depends critically on whether the monetary authority can commit to follow its policies. If it can commit, then debt constraints can only impose costs. If it cannot commit, then fiscal policy has a free-rider problem, and debt constraints may be desirable. This type of free-rider problem is new and arises only because of a time inconsistency problem.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w10232 (Browse shelf(Opens below))	Not For Loan

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Previous	nber w1023 Observations on the Indexation of Old Age Pensions /	nber w10230 Helping the Poor to Help Themselves: Debt Relief or Aid /	nber w10231 Efficiency with Endogenous Population Growth /	nber w10232 On the Desirability of Fiscal Constraints in a Monetary Union /	nber w10233 Market Reactions to Export Subsidies /	nber w10234 Population and Regulation /	nber w10235 The Geography of Stock Market Participation: The Influence of Communities and Local Firms /	Next

January 2004.

The desirability of fiscal constraints in monetary unions depends critically on whether the monetary authority can commit to follow its policies. If it can commit, then debt constraints can only impose costs. If it cannot commit, then fiscal policy has a free-rider problem, and debt constraints may be desirable. This type of free-rider problem is new and arises only because of a time inconsistency problem.