This book focuses on the construction of the economic policies of the Economic and Monetary Union (EMU) and its institutions. It reviews the faltering economic performance of the EMU countries before and after the onset of the financial crisis.

The paper revisits the empirical link between fiscal policy and macroeconomic stability. Our basic presumption is that by definition, the operation of automatic stabilizers should always and everywhere contribute to greater macroeconomic stability (output and consumption). However, two stylized...