{"id":112714,"date":"2024-01-22T17:42:22","date_gmt":"2024-01-22T16:42:22","guid":{"rendered":"https:\/\/www.wifo.ac.at\/publication\/112714\/"},"modified":"2025-10-22T21:46:56","modified_gmt":"2025-10-22T19:46:56","slug":"monetary-and-fiscal-policy-interactions-in-the-emu-when-cyclical-conditions-are-uncertain","status":"publish","type":"publication","link":"https:\/\/www.wifo.ac.at\/en\/publication\/112714\/","title":{"rendered":"Monetary and Fiscal Policy Interactions in the EMU when Cyclical Conditions are Uncertain"},"content":{"rendered":"","protected":false},"featured_media":0,"template":"","class_list":["post-112714","publication","type-publication","status-publish","hentry"],"acf":{"subtitle":"","text":"This paper examines economic policy interactions in the Economic and Monetary Union when the assessment of cyclical conditions in real time is surrounded by uncertainty. On the basis of a simple stylised model it shows that with a Nash-type of interaction different views about the output gap on the side of the policy players \u2013 the Council of the European Union, the European Commission and the European Central Bank \u2013 can give rise to excessive activism with policy players pushing economic variables into opposite directions. It argues that the costs of such policy conflicts can be reduced by agreeing on a common assessment of the cycle, by constraining policy variables, and\/or by increasing the weight of fiscally conservative institutions. An alternative option to sidestep policy conflicts ensuing from diverging views of the cycle is to take policy decisions sequentially, as is the case in a Stackelberg-type of interaction. The paper shows that for a given misperception of the cycle, the impactS on the policy instruments and on output and inflation are generally smaller in the Stackelberg equilibrium as compared to a Nash outcome. Alternative allocations of roles \u2013 that is leader versus follower \u2013 are discussed and assessed.","onlinedate":"2009-02-01 01:00:00","lang":"English","publication_series":"","publication_date":"20090201","publication_date_year":"","publication_date_full":false,"publication_num_pages":"","keywords":"[]","jelcodes":"[]","related_publications":"[]","pdf":null,"zip":null,"link":"http:\/\/www.springer.com\/10663","monthly_report":false,"monthly_report_main":false,"monthly_report_volume":"36","monthly_report_pages":"21-44","monthly_report_pages_sort":"21","issue":"1","journal":"Empirica","publisher":"","invisible":false,"external":true,"embargo_date":null,"types":[83083],"research_groups":[3500],"collaboration":"","persons":[11415,14837,14835],"persons_data":"[{\"personId\":11415,\"personName\":\"Marco Buti\",\"organisationNames\":[]},{\"personId\":14837,\"personName\":\"Martin Larch\",\"organisationNames\":[]},{\"personId\":14835,\"personName\":\"Fabio Balboni\",\"organisationNames\":[]}]","clients":[],"subclients":[],"partners":[],"topics":[],"host_publication_title":"","host_publication_subtitle":"","place_of_publication":"","host_publication_editors":"[]","type_description":"","output_media":"","chapter":"","article_number":"","scientific_assistance":"[]","scientific_review":"[]","version":"","release_date":null,"expiration_date":null,"surveyor":"","research_assistance":"","edv":"","additional_info_de":"","additional_info_en":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.3 (Yoast SEO v27.3) - 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