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Does monetary unification lead to excessive debt accumulation

Beetsma,R.M.W.J.
; 
Bovenberg,A.L.
Abstract
If discretionary monetary policy implies an inflation bias, monetary unification boosts the accumulation of public debt. The additional debt accumulation is welfare reducing only if governments are sufficiently myopic. In the presence of myopic governments, debt ceilings play a useful role in avoiding excessive debt accumulation in a monetary union and allow a conservative, independent central bank to focus on price stability
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Pagination: 24
Date
1995
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Unknown Publisher
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Tilburg University Research Output Collection
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Keywords
Central Banks, Monetary Policy, EMS, Public Debt, monetary economics, E58 - Central Banks and Their Policies, E61 - Policy Objectives ; Policy Designs and Consistency ; Policy Coordination, E62 - Fiscal Policy ; Modern Monetary Theory, E52 - Monetary Policy, SDG 17 - Partnerships for the Goals
Citation
Beetsma, R M W J & Bovenberg, A L 1995 'Does monetary unification lead to excessive debt accumulation' CentER Discussion Paper, vol. 1995-112, Unknown Publisher.
URI
https://hdl.handle.net/20.500.14602/26276
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