The objective of this article is to analyze the efficiency conditions of a coordinate rule. And from there, to establish the institutional framework best adapted to this rule. The proposed model starts from a position of perfect coordination of fiscal policies. Two cases are considered: (1) a strict coordination rule, (2) a flexible coordination rule. The first case is modeled within a symmetric information game, the second one within an asymmetric information situation. The theoretical results suggest policy implications about the optimal institutional structure in Europe.
FOURÇANS, A. and WARIN, T. (2000). Fiscal Policy in the European Monetary Union: Analytical Framework. Global Economy Journal, pp. 205-216.