The Political Economy of Fiscal Policy in EMU
AbstractThis paper treats low inflation in EMU as a collective action problem for Ecofin. The SGP and more broadly the BEPG, operating against a background of the ECB and wage-setting, are the instruments for this. The ECB delegates sanctioning to the member-states while pre-serving the authority to set interest rates. Labour relations systems in different countries pursue disinflationary wage settlements. The BEPG (including the SGP) therefore have to be understood as a critical element in a signalling game between the ECB, Ecofin and the wage-setting systems.
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Bibliographic InfoArticle provided by European Political Economy Infrastructure Consortium in its journal European Political Economy Review.
Volume (Year): 1 (2003)
Issue (Month): Spring ()
EMU; fiscal policy; Stability; Growth Pact;
Find related papers by JEL classification:
- F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
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