Abstract
The monetary union consists of two countries, say Germany and France. The member countries are the same size and have the same behavioural functions. This chapter is based on target system A. The target of the German government is zero unemployment in Germany. An increase in German government purchases lowers unemployment in Germany. On the other hand, it raises producer inflation there. For ease of exposition we assume that fiscal policy in one of the countries has no effect on unemployment or producer inflation in the other country.
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© 2011 Springer-Verlag Berlin Heidelberg
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Carlberg, M. (2011). Target System A. In: Dynamic Policy Interactions in a Monetary Union. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-18228-0_9
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DOI: https://doi.org/10.1007/978-3-642-18228-0_9
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Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-18227-3
Online ISBN: 978-3-642-18228-0
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