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The impact of the European Union fiscal rules on economic growth

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  • Castro, Vitor

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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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

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

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Citations

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Cited by:
  1. 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.
  2. Vítor Castro, 2007. "The Impact of the European Union Fiscal Rules on Economic Growth," NIPE Working Papers, NIPE - Universidade do Minho 10/2007, NIPE - Universidade do Minho.
  3. Luca Agnello & Vitor Castro & Ricardo M. Sousa, 2013. "Are There Change-Points in the Likelihood of a Fiscal Consolidation Ending?," GEMF Working Papers 2013-06, GEMF - Faculdade de Economia, Universidade de Coimbra.
  4. L, Agnello. & R, M. Sousa., 2012. "How does Fiscal Consolidation Impact on Income Inequality?," Working papers, Banque de France 382, Banque de France.
  5. 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).

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