IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

No Credit for Transition: European Institutions and German Unemployment

Listed author(s):
  • John Driffill

    (University of London and CEPR)

  • Marcus Miller

    (University of Warwick and CEPR)

The Stability and Growth Pact, adopted by members of the European Union, imposes tight limits on government deficits. But since the collapse of Communism, Europe has been faced with the problems of economies in transition: and reunified Germany—the leading economy of the EU‐‐‐combines a prosperous western state and an eastern economy in the process of transition. In a model where unions play a key role in wage bargaining and transition imposes a substantial burden on the national budget, we analyze the implications of balancing the budget for the path of unemployment. Where high but temporary costs are financed by raising taxes on employment to satisfy the Stability and Growth Pact, then the title is a misnomer: relative to a policy of "tax smoothing", the pact increases unemployment and slows growth. In designing fiscal rules for Europe, the benefits of tax smoothing must be weighed in the balance along with the virtues of fiscal discipline. Copyright Scottish Economic Society 2003

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:
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 look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Scottish Economic Society in its journal Scottish Journal of Political Economy.

Volume (Year): 50 (2003)
Issue (Month): 1 (February)
Pages: 41-60

in new window

Handle: RePEc:bla:scotjp:v:50:y:2003:i:1:p:41-60
Contact details of provider: Web page:

More information through EDIRC

Order Information: Web:

No references listed on IDEAS
You can help add them by filling out this form.

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

When requesting a correction, please mention this item's handle: RePEc:bla:scotjp:v:50:y:2003:i:1:p:41-60. 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)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.