The recent experience after the financial crisis has led to some debate on the role of economic policies; in particular, the implications of monetary policy regimes. However, at a theoretic analysis level, open-economy models only show the two polar cases of flexible and fixed exchange rates, while monetary unions are not properly described. In this paper, we will analyze how economic policies responses have contributed to offset the decline of GDP growth after a financial shock. Our main contribution will be to extend the standard approach providing a macroeconomic model that describes a monetary union.

Keywords: financial crisis, economic policies, monetary unions.