%0 Journal Article
%T Applied Mathematical Theory for Monetary-Fiscal Interaction in a Supranational Monetary Union
%A Bodo Herzog
%J Journal of Applied Mathematics and Physics
%P 737-744
%@ 2327-4379
%D 2014
%I Scientific Research Publishing
%R 10.4236/jamp.2014.28081
%X <p style=\"text-align:justify;\">
	<span style=\"font-size:12px;line-height:1.5;font-family:Verdana;\">I utilize a
differentiable dynamical system </span><span style=\"font-size:12px;line-height:1.5;font-family:Verdana;\">ив</span><span style=\"font-size:12px;line-height:1.5;font-family:Verdana;\"> la Lotka-Voletrra and explain monetary and fiscal interaction
in a supranational monetary union. The paper demonstrates an applied
mathematical approach that provides useful insights about the interaction mechanisms
in theoretical economics in general and a monetary union in particular. I find
that a common central bank is necessary but not sufficient to tackle the new
interaction problems in a supranational monetary union, such as the free-riding
behaviour of fiscal policies. Moreover, I show that supranational institutions,
rules or laws are essential to mitigate violations of decentralized fiscal
policies.</span>
</p>
%K Differential Equations
%K Monetary-Fiscal Interaction
%K Monetary Union Theory
%U http://www.scirp.org/journal/PaperInformation.aspx?PaperID=47408