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Berriel, Rafael, Gonzalez-Aguado, Eugenia
, Kehoe, Patrick J. and Pastorino, Elena
(2024)
Is a fiscal union optimal for a monetary union?
Journal of Monetary Economics, vol. 141.
pp. 157-177.
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Abstract
When is a fiscal union appropriate for a monetary union? In a monetary union without fiscal externalities, when local fiscal authorities have an informational advantage over a central fiscal authority in terms of their knowledge of countries’ preferences for government spending, a decentralized fiscal regime dominates a centralized one. Our novel result is that in the presence of fiscal externalities across countries, however, a decentralized fiscal regime is optimal for small monetary unions, whereas a centralized fiscal regime is optimal for large ones. These results shed new light on the debate on fiscal integration within the EU and its enlargement.
| Item Type: | Article |
|---|---|
| Language: | English |
| Date: | January 2024 |
| Refereed: | Yes |
| Place of Publication: | Amsterdam |
| Uncontrolled Keywords: | Fiscal Delegation, Fiscal Federalism, Externalities, Public Goods, European, Union Enlargement |
| JEL Classification: | E6 - Macroeconomic Policy Formation, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination E62 - Fiscal Policy; Public Expenditures, Investment, and Finance; Taxation E65 - Studies of Particular Policy Episodes F42 - International Policy Coordination and Transmission |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Site: | UT1 |
| Date Deposited: | 12 Jan 2024 09:27 |
| Last Modified: | 04 Feb 2025 15:05 |
| OAI Identifier: | oai:tse-fr.eu:128956 |
| URI: | https://publications.ut-capitole.fr/id/eprint/48533 |
