The fragility of an incomplete monetary union with Mathematica

In this blog, I will show how to build a model of the fragility of an incomplete monetary union. The idea is to find the optimal inflation rule and to examine different configurations for fixed exchange rate and expectation of a devaluation.

To this end, I will use Mathematica and the chapter 5 of this book (, that I use in my lectures on Economics of Monetary Union. Allow me to explain the different steps in the notebook below. I would like to publicly thank Paul De Grauwe for providing his very clear lecture notes.

The notebook is also available here in a PDF format and here in a Mathematica notebook.


Economics of the Monetary Union, Thirteenth Edition, 2020, ISBN: 9780198849544, 304 pages,

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