{ "title": "Is Fiscal Policy Coordination in EMU Desirable?", "publication": "IMF Working Papers, November 1, 2001", "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/is-fiscal-policy-coordination-in-emu-desirable-15406", "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/30/is-fiscal-policy-coordination-in-emu-desirable-15406", "overlayPath": "/en/publications/wp/issues/2016/12/30/is-fiscal-policy-coordination-in-emu-desirable-15406/index.md", "summary": "It is widely argued that Europe's unified monetary policy calls for international coordination at the fiscal level. We survey the issues involved in such coordination in the perspective of macroeconomic stabilization.", "sections": [ { "heading": "Summary findings", "content": "- A unified European monetary policy motivates consideration of international fiscal coordination from the perspective of macroeconomic stabilization.\n- A simple model identifies when coordination may be desirable:\n - Coordination is beneficial when the cross-country correlation of the shocks is low.\n - Coordination is likely counterproductive when demand or supply shocks are highly symmetric across countries and governments cannot acquire a strategic leadership position vis-à-vis the ECB.\n- Potential adverse reactions by the ECB can arise from:\n - Free-riding by fiscal authorities.\n - A conflict on the orientation of the policy mix between fiscal authorities and the ECB." }, { "heading": "Model insights and scenarios", "content": "- Primary criterion for beneficial coordination:\n - Low cross-country correlation of shocks favors fiscal coordination.\n- Adverse-case scenario:\n - High symmetry of demand or supply shocks across countries combined with absence of strategic fiscal leadership leads to counterproductive outcomes due to ECB reactions." }, { "heading": "Policy implications and considerations", "content": "- Fiscal coordination should be evaluated against:\n - The degree of shock correlation across EMU countries.\n - The likely strategic interaction between fiscal authorities and the ECB, including risks of free-riding and policy-mix conflict.\n- Effective coordination may require mechanisms that:\n - Mitigate adverse ECB responses.\n - Enable a credible leadership position for fiscal authorities when needed." }, { "heading": "Key facts and metadata (preserved exactly)", "content": "- Authors: Roel M. W. J. Beetsma, Xavier Debrun, Franc Klaassen\n- Date: November 1, 2001\n- Pages: 46\n- Volume: 2001\n- Issue: 178\n- Series: Working Paper No. 2001/178\n- DOI: https://doi.org/10.5089/9781451858952.001\n- Stock No: WPIEA1782001\n- ISBN: 9781451858952\n- ISSN: 1018-5941\n- Subject keywords: Economic theory, Financial services, Fiscal policy, Fiscal stance, Inflation, Price stabilization, Prices, Real interest rates, Supply shocks\n\nIMF Working Paper No. 2001/178 (Beetsma, Debrun, Klaassen), November 1, 2001.\n\n---\n\n Content in this bundle\n\n- Is Fiscal Policy Coordination in EMU Desirable? - WP/01/178\n - Is Fiscal Policy Coordination in EMU Desirable? - WP/01/178 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Is Fiscal Policy Coordination in EMU Desirable? - WP/01/178 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/is-fiscal-policy-coordination-in-emu-desirable-15406" } ], "bullets": [ "[Markdown version](/en/publications/wp/issues/2016/12/30/is-fiscal-policy-coordination-in-emu-desirable-15406/index.md)", "[Structured JSON version](/en/publications/wp/issues/2016/12/30/is-fiscal-policy-coordination-in-emu-desirable-15406/index.json)", "[Bundle manifest](/en/publications/wp/issues/2016/12/30/is-fiscal-policy-coordination-in-emu-desirable-15406/bundle-manifest.json)", "Authors: Roel M. W. J. Beetsma, Xavier Debrun, Franc Klaassen", "Published: November 1, 2001", "Series: IMF Working Papers", "DOI: https://doi.org/10.5089/9781451858952.001", "A unified European monetary policy motivates consideration of international fiscal coordination from the perspective of macroeconomic stabilization.", "A simple model identifies when coordination may be desirable:", "Potential adverse reactions by the ECB can arise from:", "Primary criterion for beneficial coordination:", "Adverse-case scenario:", "Fiscal coordination should be evaluated against:", "Effective coordination may require mechanisms that:", "Authors: Roel M. W. J. Beetsma, Xavier Debrun, Franc Klaassen", "Date: November 1, 2001", "Pages: 46", "Volume: 2001", "Issue: 178", "Series: Working Paper No. 2001/178", "DOI: https://doi.org/10.5089/9781451858952.001", "Stock No: WPIEA1782001", "ISBN: 9781451858952", "ISSN: 1018-5941", "Subject keywords: Economic theory, Financial services, Fiscal policy, Fiscal stance, Inflation, Price stabilization, Prices, Real interest rates, Supply shocks", "**Is Fiscal Policy Coordination in EMU Desirable? - WP/01/178**" ], "related": [ { "title": "Is Fiscal Policy Coordination in EMU Desirable? - WP/01/178", "role": "document", "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2001/_wp01178.pdf", "summary": { "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2001/_wp01178.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2001/_wp01178.pdf", "mime": "application/pdf" } } ], "alternates": { "markdown": "/en/publications/wp/issues/2016/12/30/is-fiscal-policy-coordination-in-emu-desirable-15406/index.md", "json": "/en/publications/wp/issues/2016/12/30/is-fiscal-policy-coordination-in-emu-desirable-15406/index.json", "bundleManifest": "/en/publications/wp/issues/2016/12/30/is-fiscal-policy-coordination-in-emu-desirable-15406/bundle-manifest.json" }, "generatedAtUtc": "2026-09-17T06:49:52.168Z" }