The objective of this paper is to empirically analyse whether sound fiscal and macroeconomic policies are beneficial to the achievement of the socio-economic development objectives enshrined in the Treaty on the Functioning of the European Union, and in particular whether sound policies have an...

Coordination arrangements should ensure that fiscal policy is conducted in a consistent manner across the various public entities and sub-sectors of general government. This dimension has gained in relevance as recent fiscal governance reforms in the European Union have put a premium on sound...

The Sapir report in 2004 famously dubbed the EU Budget a historical relic. In spite of calls from many quarters for a comprehensive budget reform, the Council negotiation was hampered by many institutional and political constraints and managed to deliver only limited change.However, the final...

This paper examines the benefits of co-ordination in EMU in a stylised manner and how these benefits have shaped the co-ordination framework in EMU. It then discusses in detail the co-ordination experience in four areas that are particularly important for the functioning of EMU: (i) fiscal...

This paper reviews the macroeconomic use of national fiscal policy in EMU and examines the rational and scope for a collective insurance system which redistributes income among countries in response to asymmetric cyclical shocks. The analysis of the record of national fiscal policies before and...

In EMU, a country may have difficulty ensuring stability in the face of asymmetric shocks; the response may be unstable, or, even if not, the real exchange rate might overshoot. Fiscal policy may help to stabilise inflation and also to target the real exchange rate. The paper argues that an...

Early work on the theory of economic policy stressed the importance of accounting for the interactions between fiscal and monetary policy. Tinbergen, and Cooper, taught us that there would be costs in missed targets, instability, and protracted imbalances if this was not done. Yet most models we...

This paper reviews the prerequisites of inflation targeting, analyses the extent to which they are met in Egypt and examines whether the Egyptian economy, under its current status, is ready to formally adopt an inflation targeting regime. It discusses why developing strong fiscal, financial and...

Most OECD countries have experienced a sharp reduction in the volatility of output and inflation over the past three decades. Although this Great Moderation process has stirred considerable interest in economic and policy circles, research on its causes has so far tended to focus on the US...

It is often argued that fiscal stabilisation in the euro area compares unfavourably with the US, not least because of the perceived limitations of the Stability and Growth Pact. This paper qualifies this perception by taking a closer look at fiscal policy making since the mid-1990s. It examines...