Raphael Corbi, Elias Papaioannou, Paolo Surico, 01 May 2019

The recent political crisis in the euro area has brought the design of fiscal policy to the forefront of public debate, with many arguing that EU-level transfers are necessary for the ‘completion’ of EMU. This column uses extensive data from a Brazilian federal transfer scheme to show that transfers can play a valuable stabilisation role in a currency union.

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