TY - JOUR
T1 - Labor Mobility and Fiscal Policy in a Currency Union
AU - Baglioni, Angelo Stefano
AU - Boitani, Andrea
AU - Bordignon, Massimo
PY - 2016
Y1 - 2016
N2 - Labor mobility is commonly taken as a property of an optimal currency area (OCA). But how does that property affect the outcome of fiscal policies? In our model, we show that perfect (costless) labor mobility is not necessarily welfare-improving, since it prevents the national fiscal authorities from pursuing independent policies, opening the way to a coordination problem. With symmetric shocks, the federal fiscal policy can improve welfare by playing a coordinating role. With asymmetric shocks, the federal policy allows both countries to reach a higher productive efficiency, provided the federal government is endowed with a federal budget
AB - Labor mobility is commonly taken as a property of an optimal currency area (OCA). But how does that property affect the outcome of fiscal policies? In our model, we show that perfect (costless) labor mobility is not necessarily welfare-improving, since it prevents the national fiscal authorities from pursuing independent policies, opening the way to a coordination problem. With symmetric shocks, the federal fiscal policy can improve welfare by playing a coordinating role. With asymmetric shocks, the federal policy allows both countries to reach a higher productive efficiency, provided the federal government is endowed with a federal budget
KW - labor
KW - labor
UR - https://publicatt.unicatt.it/handle/10807/93666
UR - https://www.scopus.com/inward/citedby.uri?partnerID=HzOxMe3b&scp=85006337170&origin=inward
UR - https://www.scopus.com/inward/record.uri?partnerID=HzOxMe3b&scp=85006337170&origin=inward
U2 - 10.1628/001522116X14739287071698
DO - 10.1628/001522116X14739287071698
M3 - Article
SN - 0015-2218
SP - 371
EP - 406
JO - FinanzArchiv
JF - FinanzArchiv
IS - 4
ER -