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This paper proposes two composite indices of well-being to examine the gap between a government’s welfare outcome and its citizens’ desired well-being and how this “welfare gap” may influence utility.

Author: Luisa Corrado (University of Rome Tor Vergata) and Giuseppe De Michele (ESM)

Abstract:

In a stylized model of Economic and Monetary Union (EMU), where centralized and national policy authorities strategically interact, this paper shows that ‘quantitative easing’ (QE) operates as an indirect risk-sharing mechanism that could improve EMU stability and the welfare of (a part of the) member states. The authors consider global financial instability and its impact on the sovereign debts of peripheral countries.