Insulation Impossible: Monetary Policy and Regional Fiscal Spillovers in a Federation

This paper studies the interactions of fiscal and monetary policies in the presence of fiscal spillovers within a monetary union. When capital markets are integrated, the fiscal policy of any member country will influence equilibrium wages and interest rates across the whole union. Thus there are fiscal spillovers within a federation. Within a general class of monetary policy rules, there does not exist one that completely insulates agents in one region from fiscal policy in another. We contrast particular rules, such as inflation and interest rate targeting, to illustrate how monetary policy becomes a channel for fiscal policy spillovers.Fiscal spillovers; Monetary union

Is it is or is it ain't my obligation? Regional debt in a fiscal federation

This paper studies the repayment of regional debt in a multiregion economy with a central authority: Who pays the obligation issued by a region? With commitment, a central government will use its taxation power to smooth distortionary taxes across regions. Absent commitment, the central government may be induced to bail out the regional government in order to smooth consumption and distortionary taxes across the regions. We characterize the conditions under which bailouts occur and their welfare implications. The gains to creating a federation are higher when the (government spending) shocks across regions are negatively correlated and volatile. We use these insights to comment on actual fiscal relations in three quite different federations: the U.S., the European Union and Argentina.Taxation

Is It Is or Is It Ain't My Obligation? Regional Debt in a Fiscal Federation

This paper studies the repayment of regional debt in a multi-region economy with a central authority: who pays the obligation issued by a region? With commitment, a central government will use its taxation power to smooth distortionary taxes across regions. Absent commitment, the central government may be induced to bailout the regional government in order to smooth consumption and distortionary taxes across the regions. We characterize the conditions under which bailouts occur and their welfare implications. The gains to creating a federation are higher when the (government spending) shocks across regions are negatively correlated and volatile. We use these insights to comment on actual fiscal relations in three quite different federations: the US, the European Union and Argentina.

Insulation Impossible: Fiscal Spillovers in a Monetary Union

This paper studies fiscal spillovers in a monetary union. The focus of the analysis is on the interaction between the fiscal policy of member countries (regions) and the central monetary authority. When capital markets are integrated, the fiscal policy of one country will inuence equilibrium wages and interest rates. Thus there are fiscal spillovers within a federation. The magnitude and direction of these spillovers, in particular the presence of a crowding out effect, can be inuenced by the choice of monetary policy rules. We find that there does not exist a monetary policy rule which completely insulates agents in one region from fiscal policy in another. Some familiar policy rules, such as pegging an interest rate, can provide partial insulation.

Insulation Impossible : Fiscal Spillovers in a Monetary Union

This paper studies the effects of monetary policy rules in a fiscal federation, such as the European Union. The focus of the analysis is the interaction between the fiscal policy of member countries (regions) and the monetary authority. Each of the countries structures its fiscal policy (spending and taxes) with the interests of its citizens in mind. Ricardian equivalence does not hold due to the presence of monetary frictions, modeled here as reserve requirements. When capital markets art integrated, the fiscal policy of one country influences equilibrium wages and interest rates. Under certain rules, monetary policy may respond to the price variations induced by regional fiscal policies. Depending on the type of rule it adopts, interventions by the monetary authority affect the magnitude and nature of the spillover from regional fiscal policy.Monetary union, inflation tax, seigniorage, monetary rules, public debt.

Is it is or is it Ain't my Obligation? Regional Debt in Monetary Unions

This paper studies the implications of the circulation of interest bearing regional debt in a monetary union. Does the circulation of this debt have the same monetary implications as the printing of money by a central government? Or are the obligations of this debt simply backed by future taxation with no inflationary consequences? We argue here that both outcomes can arise in equilibrium. In the model economy we consider there are multiple equilibria which reflect the perceptions of agents regarding the manner in which the debt obligations will be met. In one equilibrium, termed Ricardian, the future obligations are met with taxation by a regional government while in the other, termed Monetization, the central bank is induced to print money to finance the region's obligations. The multiplicity of equilibria reflects a commitment problem of the central bank. A key indicator of the selected equilibrium is the distribution of the holdings of the regional debt. We use the model to assess the impact of policy measures, such as fiscal restrictions, within a monetary union.

School Desegregation and the Office of Education Guidelines

Fourteen years after the Supreme Court\u27s 1954 ruling in the school segregation cases, school segregation is still with us, North and South. Those optimistic and hopeful individuals who saw a rapid end to segregation in the Court\u27s ruling, in the passage of the 1964 Civil Rights Act, in the 1965 Voting Rights Act, and in other concerted activity designed to end segregation have been disappointed. In an apparent effort to improve both the quantity and quality of desegregation plans in the public schools, the Department of Health, Education and Welfare has promulgated a set of guidelines to aid in the desegregation of school districts

Cytokine response to typical field sports practices in adolescent athletes

The present study compares previous reports on the effect of “real-life” typical field individual (i.e. cross country running and wrestling – representing combat versus non-combat sports) and team sports (i.e. volleyball and water-polo – representing water and land team sports) training on pro (IL-6) and anti (IL-1 receptor antagonist – IL-1ra) inflammatory mediators in male and female late pubertal athletes. An increase in IL-6 was found following each of the training sessions. In contrast, a significant increase in IL-1ra was found only following the cross-country, wrestling and water-polo practices and not following the volleyball practices in both genders. There was no difference in the inflammatory response between individual and team sports practices. The inflammatory response to the typical practices was correlated with the practice-associated lactate change. The greatest increase in IL-6 and IL-1ra occurred following contact sport practices, and was greater following land (wrestling) compared to the water (water-polo) practice suggesting that this increase may reflect muscle tissue damage and not necessarily training intensity. Further research is needed to better understand the influence of “real-life” typical training on exercise training adaptations of adolescent athletes