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Does the EMU Need a Fiscal Transfer Mechanism?

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  • Davide Furceri

Abstract

The aim of this paper is to investigate how the birth of a central fiscal authority or the creation of a fiscal transfer mechanism could improve the action of fiscal policy in terms of stabilization in the EMU. In particular, the paper examines the theoretical reasons to support this conclusion and provides empirical evidence that shows how the EMU is not able to face asymmetric and symmetric idiosyncratic shocks. Die zentrale Frage des Aufsatzes lautet: Ob und wie kann eine zentrale Fiskalbehörde oder ein fiskalischer Transfermechanismus die fiskalpolitische Stabilisierung in der EWU verbessern? Dazu werden theoretische Argumente und empirische Evidenz präsentiert, die die These bestätigen, dass die gegenwärtige EWU nicht in der Lage ist, asymmetrische und symmetrische idiosynkratische Schocks zu verarbeiten.

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File URL: http://ejournals.duncker-humblot.de/doi/pdf/10.3790/vjh.73.3.418
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Bibliographic Info

Article provided by DIW Berlin, German Institute for Economic Research in its journal Vierteljahrshefte zur Wirtschaftsforschung.

Volume (Year): 73 (2004)
Issue (Month): 3 ()
Pages: 418-428

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Handle: RePEc:diw:diwvjh:73-30-8

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  1. Mario J Crucini & Gregory D Hess, 1999. "International and Intranational Risk Sharing," CESifo Working Paper Series 227, CESifo Group Munich.
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Cited by:
  1. Paul Cashin & Antonio Lemus, 2012. "The Eastern Caribbean Currency Union," IMF Working Papers 12/17, International Monetary Fund.

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