Data and Code for: Fiscal Backing for Price Stability in a Monetary Union

Fiscal backing is the idea that for the price level to be uniquely determined, fiscal policy mustbe active (as in Leeper, 1991) at least in some states of the world. We extend the fiscal theory ofthe price level to the case of a heterogenous monetary union. Different combinations of nationalfiscal policies and a common fiscal policy with “Eurobonds” amount to active fiscal policy forthe union. They all yield price level determinacy, but can have very different implications forthe effects of fiscal and monetary policy. We propose how to coordinate the national policiesand the common policy to provide fiscal backing reliably.