For ease of exposition we make the following assumptions. The monetary union consists of two countries, say Germany and France. The member countries are the same size and have the same behavioural functions. An increase in German government purchases lowers unemployment in Germany. Correspondingly, an increase in French government purchases lowers unemployment in France. For ease of exposition we assume that fiscal policy in one of the countries has no effect on unemployment in the other country.
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© 2008 Springer-Verlag Berlin Heidelberg
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(2008). Fiscal Policies in Germany and France. In: Inflation and Unemployment in a Monetary Union. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-79301-4_10
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DOI: https://doi.org/10.1007/978-3-540-79301-4_10
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-79300-7
Online ISBN: 978-3-540-79301-4
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