Applied mathematical theory for monetary-fiscal interaction in a supranational monetary union
- I utilize a differentiable dynamical system á la Lotka-Voletrra and explain monetary and fiscal interaction in a supranational monetary union. The paper demonstrates an applied mathematical approach that provides useful insights about the interaction mechanisms in theoretical economics in general and a monetary union in particular. I find that a common central bank is necessary but not sufficient to tackle the new interaction problems in a supranational monetary union, such as the free-riding behaviour of fiscal policies. Moreover, I show that upranational institutions, rules or laws are essential to mitigate violations of decentralized fiscal policies.
| Author of HS Reutlingen | Herzog, Bodo |
|---|---|
| URN: | urn:nbn:de:bsz:rt2-opus4-559 |
| DOI: | https://doi.org/10.4236/jamp.2014.28081 |
| ISSN: | 2327-4352 |
| eISSN: | 2327-4379 |
| Published in: | Journal of applied mathematics and physics |
| Publisher: | Scientific Research Publishing |
| Place of publication: | Irvine, California |
| Document Type: | Journal article |
| Language: | English |
| Publication year: | 2014 |
| Tag: | differential equations; monetary union theory; monetary-fiscal interaction |
| Volume: | 2 |
| Issue: | 8 |
| Page Number: | 8 |
| First Page: | 737 |
| Last Page: | 744 |
| DDC classes: | 330 Wirtschaft |
| 510 Mathematik | |
| Open access?: | Ja |
| Licence (German): |  Creative Commons - Namensnennung |
