Advanced Search
MyIDEAS: Login

Fiscal Policy, Automatic Stabilisers and Policy Coordination in EMU

Contents:

Author Info

  • Matti Virén
Registered author(s):

    Abstract

    This paper deals with fiscal policy coordination. In particular, it focuses on the question of how fiscal policy can be coordinated inside EMU, where countries still differ considerably in terms of cyclical behaviour and importance of country-specific shocks and well as the fiscal policy multipliers. To answer this question, we carry out comparative analyses on both automatic stabilisers and policy effects. We also scrutinise the uncertainty, which is related to different indicators of fiscal policy, as well as the forecast uncertainty in terms of the cyclical situation. We find strikingly large differences in both the cyclical effects and policy effects that together with considerable forecasting uncertainty suggest that policy coordination may be enormously difficult. Not surprisingly, we also find that there is very little evidence of fiscal policy coordiation. The main reason for this state of affairs is probably the differences in past policy behaviour among the EU and as well as OECD countries.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.vatt.fi/file/vatt_publication_pdf/k204.pdf
    Download Restriction: no

    File URL: http://www.vatt.fi/publications/latestPublications/publication/Publication_1345_id/69
    Download Restriction: no

    Bibliographic Info

    Paper provided by Government Institute for Economic Research Finland (VATT) in its series Discussion Papers with number 204.

    as in new window
    Length:
    Date of creation: 01 Jan 1999
    Date of revision:
    Handle: RePEc:fer:dpaper:204

    Contact details of provider:
    Postal: Arkadiankatu 7, P.O. Box 1279, FI-00101 Helsinki
    Phone: +358 295 519 400
    Fax: +358 295 519 599
    Email:
    Web page: http://www.vatt.fi/
    More information through EDIRC

    Order Information:
    Email:

    Related research

    Keywords: Fiscal policy; forecasts; coordination;

    Find related papers by JEL classification:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. W. Max Corden, 1985. "On Transmission And Coordination Under Flexible Exchange Rates," NBER Chapters, in: International Economic Policy Coordination, pages 8-36 National Bureau of Economic Research, Inc.
    2. Ray C. Fair, 1977. "On Modeling the Economic Linkages among Countries," Cowles Foundation Discussion Papers 465, Cowles Foundation for Research in Economics, Yale University.
    3. Olivier Jean Blanchard, 1990. "Suggestions for a New Set of Fiscal Indicators," OECD Economics Department Working Papers 79, OECD Publishing.
    4. Canzoneri, Matthew B & Minford, Patrick, 1986. "When International Policy Coordination Matters: An Empirical Analysis," CEPR Discussion Papers 119, C.E.P.R. Discussion Papers.
    5. Blinder, Alan S. & Solow, Robert M., 1973. "Does fiscal policy matter?," Journal of Public Economics, Elsevier, vol. 2(4), pages 319-337.
    6. Peter Brandner & Leopold Diebalek & Helene Schuberth, 1998. "Structural Budget Deficits and Sustainability of Fiscal Positions in the European Union," Working Papers 26, Oesterreichische Nationalbank (Austrian Central Bank).
    7. Maurice Obstfeld & Kenneth S. Rogoff, 1996. "Foundations of International Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262150476, December.
    8. Tanzi, Vito & Schuknecht, Ludger, 1997. "Reconsidering the Fiscal Role of Government: The International Perspective," American Economic Review, American Economic Association, vol. 87(2), pages 164-68, May.
    9. Mayes, David G. & Viren, Matti, 1998. "The Exchange Rate and Monetary Conditions in the Euro Area," Research Discussion Papers 27/1998, Bank of Finland.
    10. Buti, Marco & Franco, Daniele & Ongena, Hedwig, 1998. "Fiscal Discipline and Flexibility in EMU: The Implementation of the Stability and Growth Pact," Oxford Review of Economic Policy, Oxford University Press, vol. 14(3), pages 81-97, Autumn.
    11. Matti Virén, 1998. "Do the OECD Countries Follow the Same Fiscal Policy Rule?," Discussion Papers 186, Government Institute for Economic Research Finland (VATT).
    12. Erkki Koskela & Matti Virén, 1999. "Is There a Laffer Curve Between Output and Public Sector Employment?," Discussion Papers 194, Government Institute for Economic Research Finland (VATT).
    13. repec:fth:bfsefi:27/98 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:fer:dpaper:204. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anita Niskanen).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.