Year: 1992
Author: Spahn, Heinz-Peter
Credit and Capital Markets – Kredit und Kapital, Vol. 25 (1992), Iss. 4 : pp. 469–490
Abstract
The ECU-Economy – Modelling the Implications of European Currency Union
The consequences of the transition of the EMS into a European Currency Union are analysed by use of a macroeconomic two-country model and a game-theoretic approach as to economic policy decisions. Supply-side distinctions of both countries, modelled by a different path of wage costs, lead to country-specific rates of interest and inflation in the EMS, but result in divergent paths of income and employment in the ECU-system. Although the European Central Bank is equipped with the same utility function as the German Bundesbank inflation and interest rates are higher as compared to the German case. Enduring disparities in the countries’ welfare promote European structural and redistributional policies with questionable results.
Journal Article Details
Publisher Name: Global Science Press
Language: Multiple languages
DOI: https://doi.org/10.3790/ccm.25.4.469
Credit and Capital Markets – Kredit und Kapital, Vol. 25 (1992), Iss. 4 : pp. 469–490
Published online: 1992-04
AMS Subject Headings: Duncker & Humblot
Copyright: COPYRIGHT: © Global Science Press
Pages: 22
Author Details
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