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One Welfare State for Europe: A Costly Utopia?

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Author Info
Thierry Warin ()
Peter Hennessy

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Abstract

This paper addresses the question of the social policy harmonization in the European Union. In adopting a common monetary policy Europe is faced with structural and fiscal concerns, as national growth levels differ. Another possible factor in output shocks are the levels of various social expenditures in the member countries. OECD data on the level of social program expenditures in four EU countries will wb compared to fluctuations in GDP growth to identify existing relationships. Significant relationships between independent social expenditure policy and GDP growth shocks portends structural harmonization as an improvement if Europe is to take full advantage of the common market. However, the effects of expenditure levels may be easier to identify and predict than the dynamic effects of policy change. As the effects of future policy changes are more difficult to ascertain, harmonization may not consistently appear to be a Pareto-optimum solution to asymmetric shocks.

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File URL: http://www.middlebury.edu/services/econ/repec/mdl/ancoec/0325.pdf
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Publisher Info
Paper provided by Middlebury College, Department of Economics in its series Middlebury College Working Paper Series with number 0325.

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Length: 21 pages
Date of creation: Sep 2003
Date of revision:
Handle: RePEc:mdl:mdlpap:0325

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Related research
Keywords: Europe; welfare state; coordination; integration;

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Find related papers by JEL classification:
D6 - Microeconomics - - Welfare Economics
H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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  1. Perotti, Roberto, 1996. "Fiscal Consolidation in Europe: Composition Matters," American Economic Review, American Economic Association, vol. 86(2), pages 105-10, May. [Downloadable!] (restricted)
  2. Alesina, Alberto & Perotti, Roberto, 1997. "The Welfare State and Competitiveness," American Economic Review, American Economic Association, vol. 87(5), pages 921-39, December. [Downloadable!] (restricted)
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  3. Bertil Holmlund, 2002. "International spillover effects of sectoral tax differentiation in unionized economies," Oxford Economic Papers, Oxford University Press, vol. 54(2), pages 207-229, April.
    Other versions:
  4. Hitiris, Theo, 1997. "Health Care Expenditure and Integration in the Countries of the European Union," Applied Economics, Taylor and Francis Journals, vol. 29(1), pages 1-6, January. [Downloadable!] (restricted)
  5. Daniel T. Slesnick, 1998. "Empirical Approaches to the Measurement of Welfare," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 2108-2165, December. [Downloadable!] (restricted)
  6. Hitiris, Theo & Nixon, John, 2001. "Convergence of Health Care Expenditure in the EU Countries," Applied Economics Letters, Taylor and Francis Journals, vol. 8(4), pages 223-28, April. [Downloadable!] (restricted)
  7. Breitung, Jorg, 2002. "Nonparametric tests for unit roots and cointegration," Journal of Econometrics, Elsevier, vol. 108(2), pages 343-363, June. [Downloadable!] (restricted)
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