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Fiscal Policy and Monetary Integration in Europe
Galí, Jordi; Perotti, Roberto - 2021
A popular view among economists, policymakers, and the media, is that the Maastricht Treaty and then Stability and Growth Pact have significantly impaired the ability of EU governments to conduct a stabilizing fiscal policy and to provide an adequate level of public infrastructure. In this...
Persistent link: https://www.econbiz.de/10013239944
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Bias in Official Fiscal Forecasts : Can Private Forecasts Help?
Frankel, Jeffrey A. - 2016
Government forecasts of GDP growth and budget balances are generally more over-optimistic than private sector forecasts. When official forecasts are especially optimistic relative to private forecasts ex ante, they are more likely also to be over-optimistic relative to realizations ex post. For...
Persistent link: https://www.econbiz.de/10012988513
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The Euro and the Stability Pact
Feldstein, Martin S. - 2021
This paper begins by discussing the inherent conflict between the simultaneous existence of a single currency for the countries of the European Economic and Monetary Union (EMU) and the independent fiscal policies of those countries. The Stability and Growth Pact was an attempt to reconcile that...
Persistent link: https://www.econbiz.de/10013211701
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The Stability and Growth Pact as an Impediment to Privatizing Social Security
Razin, Assaf; Sadka, Efraim - 2022
The aging of the population shakes the confidence in the economic viability of pay-as-you-go social security systems. We demonstrate how in a political-economy framework the shaken cofidence leads to the downsizing of the social security-system, and to the emergence of supplemental individual...
Persistent link: https://www.econbiz.de/10013322100
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How Do Monetary and Fiscal Policy Interact in the European Monetary Union?
Canzoneri, Matthew B. - 2012
Formation of the Euro area raises new questions about the coordination of monetary and fiscal policy. Using a New Neoclassical Synthesis (NNS) model, we show that a common monetary policy, responding to area-wide aggregates, has asymmetric effects on countries within the union, depending on...
Persistent link: https://www.econbiz.de/10013100660
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Over-Optimistic Official Forecasts in the Eurozone and Fiscal Rules
Frankel, Jeffrey A. - 2012
. The members of the eurozone are supposedly constrained by the fiscal caps of the Stability and Growth Pact. Yet ever since …:•Governments' budget forecasts are biased in the optimistic direction, especially among the Eurozone countries, especially when they have …-optimistic during booms.•Despite the well-known tendency of eurozone members to exceed the 3% cap on budget deficits, often in …
Persistent link: https://www.econbiz.de/10013102194
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The Euro and Fiscal Policy
Fatás, Antonio - 2010
The paper provides and empirical characterization of fiscal policy in the euro area and in a group of twenty-two OECD economies over the period from 1970 until 2007. Using the cyclically-adjusted fiscal balance we document that policy in the euro area has been mildly pro-cyclical. The adoption...
Persistent link: https://www.econbiz.de/10012757871
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Government Investment and the European Stability and Growth Pact
Bassetto, Marco - 2010
We consider the effect of excluding government investment from the deficit subject to the limits of the European Stability and Growth Pact. In the model we consider, residents of a given country discount future costs and benefits of government spending more than efficiency would dictate, because...
Persistent link: https://www.econbiz.de/10012759973
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The Ecb's Fiscal Policy
Sinn, Hans-Werner - 2018
While the ECB helped mitigate the euro crisis in the aftermath of Lehman, it has stretched its monetary mandate and moved into fiscal territory. This text describes and summarizes the crucial role played by the ECB in the intervention spiral resulting from its bid to manage the crisis. It also...
Persistent link: https://www.econbiz.de/10012918640
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Do Balanced Budget Rules Work? U.S. Experience and Possible Lessons for the Emu
Inman, Robert P. - 2021
The `Excessive Deficit Procedure' of the Maastricht Treaty on Economic and Monetary Union proposes two fiscal convergence conditions for entry and continued membership in the EMU: 1) a country's overall budget deficit for each fiscal year must be equal to or below 3% of GDP, and 2) a country's...
Persistent link: https://www.econbiz.de/10013223574