Fiscal Indulgence In Central Europe: Loss Of The External Anchor?
AbstractIn recent years, fiscal performance in Central Europe has steadily deteriorated, in contrast to the improvement in the Baltics. This paper explores the determinants of such differences among countries on the path to EU accession. Regression estimates suggest that economic and institutional fundamentals do not provide a full explanation. An alternative explanation lies in the political economy of the accession process, and a game-theoretic model illustrates why a country with a stronger bargaining position might have an incentive to deviate from convergence to the Maastricht criteria. The model generates alternative fiscal policy regimesÂallowing for regime shiftsÂdepending on country characteristics and EU policies. --
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Bibliographic InfoArticle provided by Scottish Economic Society in its journal Scottish Journal of Political Economy.
Volume (Year): 54 (2007)
Issue (Month): 1 (02)
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Other versions of this item:
- Berger, Helge & Kopits, George & Székely, István P., 2006. "Fiscal indulgence in Central Europe: loss of the external anchor?," Discussion Papers 2006/9, Free University Berlin, School of Business & Economics.
- H6 - Public Economics - - National Budget, Deficit, and Debt
- C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
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