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Content archived on 2024-05-24

Macroeconomic policy design for monetary unions

Objective

EMU is an experiment without precedent. It presents European policy-makers with formidable challenges and the research community with fascinating and little understood analytical puzzles. This Network aims to provide a rigorous account of the operation of macroeconomic policy in Europe, both within the euro area and in its periphery. It will also provide high-quality training to a new generation of young researchers, in an area where specialists are in insufficient supply. The project will build on the latest developments in macroeconomics to assess:
- the desirability of alternative monetary policy strategies for the ECB.
- the need for coordination between monetary and fiscal authorities (and/or among the fiscal authorities themselves) within EMU.
- the desirability of altemative monetary and exchange rate arrangements for neighboring European countries who are not members of EMU. Recent macroeconomic research has introduced imperfect competition and nominal rigidities into models based on a dynamic stochastic general equilibrium framework. In these models, monetary policy is found to be a potential stabilization tool, but also an independent source of economic fluctuations. The proposed network will extend this promising new line of research to the modeling of a large monetary union, made up of several economies subject to idiosyncratic shocks and with independent fiscal policies. Our objective is to develop tractable dynamic general equilibrium models that incorporate some of the key features found in the recent literature, including the existence of staggered price and wage setting by optimizing, forward-looking firms and workers. The network's research agenda will address four main issues: - The analysis of optimal monetary policy for a monetary union with members subject to idiosyncratic shocks - The interaction of monetary with independent fiscal policies - The analysis of optimal monetary policy and exchange rate arrangements for

Fields of science (EuroSciVoc)

Topic(s)

Data not available

Call for proposal

Data not available

Funding Scheme

NET - Research network contracts

Coordinator

CENTRE DE RECERCA EN ECONOMIA INTERNATIONAL CREI
EU contribution
No data
Address
Ramon Trias Fargas 25/27
08005 BARCELONA
Spain
Total cost
No data

Participants (7)