UNSPECIFIED (1997) Fiscal policy coordination with demand spillovers and unionised labour markets. ECONOMIC JOURNAL, 107 (441). pp. 403-417. ISSN 0013-0133

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Abstract

We explore the incentives for governments to cooperate by expanding expenditure. We have three countries: two are in a monetary union (the EMU). The labour markets of both the EMU countries are unionised, and there is involuntary unemployment in equilibrium. We explore the intra and intercountry effects of changes in bargaining power. We then examine optimal government expenditures in each EMU country; we find that there is a positive spillover, and that expenditures are strategic complements. The coordinated equilibrium involves higher expenditure than the uncoordinated equilibrium.

Item Type:	Journal Article
Subjects:	H Social Sciences > HC Economic History and Conditions
Journal or Publication Title:	ECONOMIC JOURNAL
Publisher:	BLACKWELL PUBL LTD
ISSN:	0013-0133
Date:	March 1997
Volume:	107
Number:	441
Number of Pages:	15
Page Range:	pp. 403-417
Publication Status:	Published
URI:	http://wrap.warwick.ac.uk/id/eprint/17910

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