Fiscal Policy Coordination with Demand Spillovers and Unionised Labour Markets
研究货币联盟中两个工会化国家在存在需求溢出时，政府合作扩大支出的激励，发现协调均衡下的支出高于非协调均衡。
We explore the incentives for governments to cooperate by expanding expenditure. We have three countries: two are in a monetary union (the EMU). The labour markets of both the EMU countries are unionised, and there is involuntary unemployment in equilibrium. We explore the intra and intercountry effects of changes in bargaining power. We then examine optimal government expenditures in each EMU country; we find that there is a positive spillover, and that expenditures are strategic complements. The coordinated equilibrium involves higher expenditure than the uncoordinated equilibrium.