... decline in the
demand for European and American goods. In terms of the model there is an
increase in
1
A of 3 units, a decline in
1
B of 3 units, an increase in
2
A of 3 units,
and a decline ... shock in Europe. In case A
monetary interaction produces zero inflation in Europe. In case B monetary
interaction lowers inflation in Europe. On the other hand,...
... to minimize the loss, given the inflation functions, the
M. Carlberg, Monetary and Fiscal Strategies in the World Economy, 217
deficit in Europe, and a zero structural deficit in America. The ... result, monetary and fiscal interaction
lowers inflation in America. On the other hand, it raises unemployment and the
structural deficit there.
Mone...
... of the model there is
an increase in
1
B of 3 units, as there is in
1
A . And there is an increase in
2
B of
3 units, as there is in
2
A . Step two refers to the outside lag. Inflation in ... result, monetary and fiscal cooperation can reduce the loss caused by
inflation, unemployment, and the structural deficit. Monetary and fiscal
cooperation is d...
... in Europe, monetary interaction
lowers inflation in Europe. On the other hand, it raises unemployment there.
279
2 74
5) Comparing monetary- fiscal interaction A and monetary- fiscal interaction ... zero percent, and let the initial
structural deficit in America be the same.
5. Monetary and Fiscal Policies in Europe and America
257
4. Mon...
... zero, and let initial inflation be zero as well. Step one refers to
a decline in the demand for European goods. In terms of the model there is an
increase in
1
A of 3 units and a decline in
1
B ... the
demand for European and American goods. In terms of the model there is an
increase in
1
A of 3 units, a decline in
1
B of 3 units, an increase in
2
A of 3...
... of the model there is
an increase in
1
B of 3 units, as there is in
1
A . And there is an increase in
2
B of
3 units, as there is in
2
A . Step two refers to the outside lag. Inflation in ... consider the effects on Europe. As a result, given another mixed shock
in Europe, monetary and fiscal cooperation lowers unemployment in Europe. On
the other hand, it...