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

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  • 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.

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  • 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
    DOI: 10.1111/j.1467-6435.2009.00439.x
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    Cited by:

    1. 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.
    2. 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.
    3. Benedikt Fritz & Lars P. Feld, 2015. "The Political Economy of Municipal Amalgamation - Evidence of Common Pool Effects and Local Public Debt," CESifo Working Paper Series 5676, CESifo.
    4. Thushyanthan Baskaran & Zohal Hessami, 2011. "A Tale of Five PIIGS: Soft Budget Constraints and the EMU Sovereign Debt Crises," Working Paper Series of the Department of Economics, University of Konstanz 2011-45, Department of Economics, University of Konstanz.
    5. 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.

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