This book studies the strategic policy interactions in a monetary union. The leading protagonists are the European Central Bank and national governments. The target of the ECB is low inflation in Europe. The targets of a national government are low unemployment and a low structural deficit. There are demand shocks, supply shocks, and mixed shocks. There are country-specific shocks and common shocks. This book develops a series of basic, intermediate, and more advanced models. Here the focus is on the Nash equilibrium. The key questions are: Given a shock, can policy interactions reduce the existing loss? And to what extent can they do so? Another topical issue is policy cooperation. To illustrate all of this there are a lot of numerical examples.

Contenu
The Monetary Union as a Whole:Absence of a Deficit Target.- Monetary Policy A.- Monetary Policy B.- Fiscal Policy A.- Fiscal Policy B.- Interaction between Central Bank and Government.- Cooperation between Central Bank and Government.- Interaction between Central Bank and Government:A Special Case.- The Monetary Union as a Whole:Presence of a Deficit Target.- Fiscal Policy A.- Fiscal Policy B.- Interaction between Central Bank and Government A.- Interaction between Central Bank and Government B.- Interaction between Central Bank and Government C.- Cooperation between Central Bank and Government.- The Monetary Union of Two Countries:Absence of a Deficit Target..- Monetary Policy in Europe A.- Monetary Policy in Europe B.- Fiscal Policy in Germany A.- Fiscal Policy in Germany B.- Interaction between European Central Bank,German Government, and French Government.- Cooperation between European Central Bank,German Government, and French Government.- The Monetary Union of Two Countries:Presence of a Deficit Target.- Fiscal Policy in Germany A.- Fiscal Policy in Germany B.- Interaction between European Central Bank,German Government, and French Government A.- Interaction between European Central Bank,German Government, and French Government B.- Interaction between European Central Bank,German Government, and French Government C.- Cooperation between European Central Bank,German Government, and French Government.- Synopsis.- Conclusion.- Result.