Inflation and unemployment in a monetary union

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This book examines the coexistence of inflation and unemployment within a monetary union, focusing on strategies to mitigate the associated losses. The European Central Bank prioritizes low inflation, while the German and French governments aim for low unemployment in their respective countries. Each entity operates with a quadratic loss function. Key questions addressed include the effectiveness of sequential monetary and fiscal decisions in reducing inflation and unemployment losses, and whether cooperation between monetary and fiscal policies yields better outcomes. This work is part of a broader research initiative on the European Monetary Union, with references provided at the end. Portions of the research have been presented at various prestigious conferences, including the World Congress of the International Economic Association, the International Conference on Macroeconomic Analysis, and several workshops and seminars focused on international economics and macroeconomics. The findings contribute to the ongoing discourse on economic policy in the context of a monetary union, highlighting the complexities and interdependencies of inflation and unemployment management.