DP342 | Macroeconomic Policy Coordination and the European Monetary System


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This paper discusses the EMS and proposals to move towards EMU in the context of recent theoretical and empirical work on international policy coordination. It treats two particular themes: asymmetry among EMS countries and its implications for policy coordination; and the coordination required to reach agreed European Community macroeconomic policies. Section 1 examines policy coordination in a fixed exchange rate system. Section 2 discusses policy coordination in the Delors Committee Report, with its emphasis on fiscal policies. Section 3 deals with asymmetry and hegemony, and Section 4 suggests reasons to strengthen "absolute" policy coordination in the EC.