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Article Dans Une Revue Journal of Monetary Economics Année : 2024

Is a fiscal union optimal for a monetary union?

Eugenia Gonzalez-Aguado
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P. Kehoe
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Résumé

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.
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Dates et versions

hal-04390164 , version 1 (12-01-2024)

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Rafael Berriel, Eugenia Gonzalez-Aguado, P. Kehoe, Elena Pastorino. Is a fiscal union optimal for a monetary union?. Journal of Monetary Economics, 2024, 141, pp.157-177. ⟨10.1016/j.jmoneco.2023.11.003⟩. ⟨hal-04390164⟩
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