Normes sociales et politiques européennes
Abstract
This paper reviews the debate on the Stability and Growth Pact. Both empirical and theoretical arguments in favour of the Pact are weak, to warrant a different and plausible (even if extreme) hypothesis: We suggest the view that the Stability Pact is a public social norm, obeyed by countries because of the fear of reputation losses. Our simple model shows that reputation issues may cause the emergence of a stable but inferior equilibrium. Within this framework, the enlargement to more undisciplined countries may worsen the problems posed by the Pact. JEL Classification: D63, D71, E62, E63.Download Info
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Bibliographic Info
Article provided by Presses de Sciences-Po in its journal Revue de l'OFCE.
Volume (Year): n° 102 (2007)
Issue (Month): 3 ()
Pages: 283-314
Contact details of provider:
Web page: http://www.cairn.info/revue-de-l-ofce.htm
Related research
Keywords: Stability Pact; stabilization policies; social norms; reputation; enlargement;Find related papers by JEL classification:
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
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