Policy Competition and Policy Cooperation in a Monetary Union

European monetary unification seems to be one of the most important events in international monetary affairs since the breakdown of Bretton Woods. It pos es a major challenge to central banks, governments, and labour unions. It opens up new fields of economic research that are both intriguing and fascinating. European Monetary Union amounts to a switch of regime. Surely the Mundell­ Fleming model of the open economy does no longer apply to Germany or France. The effects of shocks and polici...