A volatility-based theory of fiscal union desirability

• 成果类型: Article
• 署名作者: Luque, Jaime; Morelli, Massimo; Tavares, Jose
• 署名单位: University of Wisconsin System; University of Wisconsin Madison; Columbia University; Universidade Nova de Lisboa
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2014.01.010
• 发表日期: 2014
• 页码: 1-11
• 关键词: Fiscal union; Common currency; Bargaining space; Voting weights; Heterogeneous countries

摘要

Heterogeneous countries may rationally choose to form a currency union first, and a fiscal union later. We find, and illustrate empirically for the EMU countries, reasonable volatility conditions under which this sequencing in the deepening process is indeed rationalizable. Changes in the distribution of expected income shocks require a reassignment of political weights to restore unanimous support for an added fiscal dimension. The bargaining space depends on countries' relative income, size, and cross correlation of shocks. (C) 2014 Elsevier B.V. All rights reserved.