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State the International Policy Coordination
There may be two sources of interdependence between national economic policies, club goods and horizontal spill overs. The first has been considered to be more innovative one and is characteristic for Stage III of EMU. So as far as spill over is concerned; it is more conventional in nature. With reference to EMU, "club goods" are defined as the economic variables that are shared among all member countries. The main club good is the basically unified, competitive market for goods, services, capital, and labour. Additional club goods, such as the price level, emerge from the fact that the member countries share a single currency, a common central bank, and a common payment system.
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What are the ways of aggregate demand policy To illustrate some of the issues involved in policy coordination we will focus on monetary policy. We discuss three ways in which
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