Fiscal indulgence in Central Europe: loss of the external anchor?
AbstractIn recent years, fiscal performance in Central Europe has steadily deteriorated, in contrast to the improvement in the Baltics. This paper explores the determinants of such differences among countries on the path to EU accession. Regression estimates suggest that economic and institutional fundamentals do not provide a full explanation. An alternative explanation lies in the political economy of the accession process, and a game-theoretic model illustrates why a country with a stronger bargaining position might have an incentive to deviate from convergence to the Maastricht criteria. The model generates alternative fiscal policy regimesallowing for regime shiftsdepending on country characteristics and EU policies. --
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Bibliographic InfoPaper provided by Free University Berlin, School of Business & Economics in its series Discussion Papers with number 2006/9.
Date of creation: 2006
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Fiscal policy; EU economic and monetary union; game-theoretic approach;
Other versions of this item:
- Helge Berger & George Kopits & István P. Székely, 2007. "Fiscal Indulgence In Central Europe: Loss Of The External Anchor?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(1), pages 116-135, 02.
- H6 - Public Economics - - National Budget, Deficit, and Debt
- C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
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