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Abstract

This paper analyses whether Maastricht and Stability and Growth Pact fiscal rules have affected growth in the European Union negatively. A growth equation is specified for a group of 15 European Union countries (and 8 OECD countries) over the period 1970-2005 to analyse this issue. Panel estimations using fixed-effects, pooled mean group and system-GMM estimators show that the institutional changes that occurred in the European Union after 1992 were not harmful to growth. Moreover, results show that growth is slightly higher in the period in which the fulfilment of the 3% criteria for the deficit started to be officially assessed, i.e. after 1997.

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File URL: http://www.sciencedirect.com/science/article/B6X4M-5125R1R-3/2/64496e134ec2c8f1ac8d22cd187abf30
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Bibliographic Info

Article provided by Elsevier in its journal Journal of Macroeconomics.

Volume (Year): 33 (2011)
Issue (Month): 2 (June)
Pages: 313-326

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Handle: RePEc:eee:jmacro:v:33:y:2011:i:2:p:313-326

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Web page: http://www.elsevier.com/locate/inca/622617

Related research

Keywords: European Union Economic growth Fiscal rules Pooled mean group estimator;

Other versions of this item:

Find related papers by JEL classification:

• E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
• H6 - Public Economics - - National Budget, Deficit, and Debt
• O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

References

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Citations

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Cited by:

1. L, Agnello. & R, M. Sousa., 2012. "How does Fiscal Consolidation Impact on Income Inequality?," Working papers 382, Banque de France.
2. Castro, Vítor, 2010. "The duration of economic expansions and recessions: More than duration dependence," Journal of Macroeconomics, Elsevier, vol. 32(1), pages 347-365, March.
   
   • Castro, Vítor, 2008. "The duration of economic expansions and recessions : More than duration dependence," The Warwick Economics Research Paper Series (TWERPS) 860, University of Warwick, Department of Economics.
   • Vítor Castro, 2008. "The duration of economic expansions and recessions: More than duration dependence," NIPE Working Papers 18/2008, NIPE - Universidade do Minho.
3. Zaenal Mutaqin & Masaru Ichihashi, 2012. "The Role of Maastricht Criteria and Membership in Determining Convergence in the Eurozone and ASEAN: A Panel Data Analysis," IDEC DP2 Series 2-7, Hiroshima University, Graduate School for International Development and Cooperation (IDEC).
4. Vítor Castro, 2007. "The Impact of the European Union Fiscal Rules on Economic Growth," NIPE Working Papers 10/2007, NIPE - Universidade do Minho.
   
   • Castro, Vitor, 2011. "The impact of the European Union fiscal rules on economic growth," Journal of Macroeconomics, Elsevier, vol. 33(2), pages 313-326, June.
   • Castro, Vítor, 2007. "The Impact Of The European Union Fiscal Rules On Economic Growth," The Warwick Economics Research Paper Series (TWERPS) 794, University of Warwick, Department of Economics.

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