IDEAS home Printed from https://ideas.repec.org/a/bla/kyklos/v62y2009i3p331-358.html
   My bibliography  Save this article

Did the Maastricht treaty matter for macroeconomic performance? A difference-in-difference investigation

Author

Listed:
  • Thushyanthan Baskaran

Abstract

We explore the impact of the Maastricht treaty on fiscal and macroeconomic outcomes in the EU with the difference-in-difference methodology. Our dataset covers 23 OECD countries over the 1975-2006 period. EU 15 countries are classified as the treatment and eight non-EU OECD countries as the control group. The results indicate that the provisions in the Maastricht treaty have been either irrelevant or even harmful for fiscal and macroeconomic developments in the EU. Evidence for a detrimental impact of the Maastricht criteria is particularly strong for the period after the start of the third stage of EMU. Copyright 2009 Blackwell Publishing Ltd.

Suggested Citation

  • Thushyanthan Baskaran, 2009. "Did the Maastricht treaty matter for macroeconomic performance? A difference-in-difference investigation," Kyklos, Wiley Blackwell, vol. 62(3), pages 331-358, August.
  • Handle: RePEc:bla:kyklos:v:62:y:2009:i:3:p:331-358
    as

    Download full text from publisher

    File URL: http://www.blackwell-synergy.com/links/doi/10.1111/j.1467-6435.2009.00439.x
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Markus Freitag & Pascal Sciarini, 2001. "The Political Economy of Budget Deficits in the European Union," European Union Politics, , vol. 2(2), pages 163-189, June.
    2. Poterba, James M., 1995. "Balanced Budget Rules and Fiscal Policy: Evidence From the States," National Tax Journal, National Tax Association, vol. 48(3), pages 329-336, September.
    3. Jakob De Haan & Jan-Egbert Sturm, 2000. "Do financial markets and the Maastricht Treaty discipline governments? New evidence," Applied Financial Economics, Taylor & Francis Journals, vol. 10(2), pages 221-226.
    4. Alexander Plekhanov & Raju Singh, 2006. "How Should Subnational Government Borrowing Be Regulated?Some Cross-Country Empirical Evidence," IMF Staff Papers, Palgrave Macmillan, vol. 53(3), pages 1-4.
    5. von Hagen, Jürgen, 2005. "Fiscal Rules and Fiscal Performance in the EU and Japan," CEPR Discussion Papers 5330, C.E.P.R. Discussion Papers.
    6. Marco Buti & Gabriele Giudice, 2002. "Maastricht's Fiscal Rules at Ten: An Assessment," Journal of Common Market Studies, Wiley Blackwell, vol. 40(5), pages 823-848, December.
    7. von-Hagen, Jurgen, 2006. "Fiscal Rules and Fiscal Performance in the European Union and Japan," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 24(1), pages 25-60, March.
    8. Mariam Camarero & Javier Ordon Ez & Cecilio Tamarit, 2002. "Tests for interest rate convergence and structural breaks in the EMS: further analysis," Applied Financial Economics, Taylor & Francis Journals, vol. 12(6), pages 447-456.
    9. Hallett, Andrew Hughes & Lewis, John, 2008. "European Fiscal Discipline Before And After Emu: Crash Diet Or Permanent Weight Loss?," Macroeconomic Dynamics, Cambridge University Press, vol. 12(03), pages 404-424, June.
    10. Poterba, James M., 1995. "Capital budgets, borrowing rules, and state capital spending," Journal of Public Economics, Elsevier, vol. 56(2), pages 165-187, February.
    11. Francisco Serranito & Christophe Blot, 2006. "Convergence of fiscal policies in EMU: a unit root test with structural break," Post-Print halshs-00174163, HAL.
    12. Marc Lombard, 2000. "Restrictive Macroeconomic Policies and Unemployment in the European Union," Review of Political Economy, Taylor & Francis Journals, vol. 12(3), pages 317-332.
    13. Corsetti, Giancarlo & Roubini, Nouriel, 1996. "European versus American Perspectives on Balanced-Budget Rules," American Economic Review, American Economic Association, vol. 86(2), pages 408-413, May.
    14. Fabio Busetti & Lorenzo Forni & Andrew Harvey & Fabrizio Venditti, 2007. "Inflation Convergence and Divergence within the European Monetary Union," International Journal of Central Banking, International Journal of Central Banking, vol. 3(2), pages 95-121, June.
    15. Geoffrey Garrett, 1993. "The Politics Of Maastricht," Economics and Politics, Wiley Blackwell, vol. 5(2), pages 105-123, July.
    16. Soukiazis, Elias & Castro, Vitor, 2005. "How the Maastricht criteria and the Stability and Growth Pact affected real convergence in the European Union: A panel data analysis," Journal of Policy Modeling, Elsevier, vol. 27(3), pages 385-399, April.
    17. Ralph Rotte & Klaus Zimmermann, 1998. "Fiscal restraint and the political economy of EMU," Public Choice, Springer, vol. 94(3), pages 385-406, March.
    18. Poterba, James M., 1995. "Balanced Budget Rules and Fiscal Policy: Evidence From the States," National Tax Journal, National Tax Association, vol. 48(3), pages 329-36, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Thushyanthan Baskaran & Zohal Hessami, 2017. "Monetary integration, soft budget constraints, and the EMU sovereign debt crises," Economics and Politics, Wiley Blackwell, vol. 29(3), pages 252-275, November.
    2. Feld, Lars P. & Fritz, Benedikt, 2015. "The political economy of municipal amalgamation: Evidence of common pool effects and local public debt," Freiburg Discussion Papers on Constitutional Economics 15/10, Walter Eucken Institut e.V..
    3. Mercedes Castro-Nuno & Jose I. Castillo-Manzano & Xavier Fageda, 2013. "The 'Europeanization' Of The Common Road Safety Policy: An Econometric Analysis," ERSA conference papers ersa13p50, European Regional Science Association.
    4. António Afonso & Raquel Balhote, 2014. "Interactions between Monetary Policy and Fiscal Policy," Working Papers Department of Economics 2014/13, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:kyklos:v:62:y:2009:i:3:p:331-358. 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: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0023-5962 .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.