Abstract
In a monetary union where fiscal authorities act strategically, fiscal cooperation is unlikely to emerge as an equilibrium. Even when the cooperative outcome is the best for a national fiscal authority, it is either not a Nash equilibrium or only one of several Nash equilibriums. The monetary authority may have an important coordinating role; however, the Paretopreferred equilibrium will not necessarily involve cooperation.
Authors
- Tatiana Kirsanova
- Celsa Machado
- Ana Paula Ribeiro
JEL codes
- E52
- E61
- E63