Normes sociales et politiques européennes
This paper reviews the debate on the Stability and Growth Pact. Both empirical and theoretical arguments in favour of the Pact are weak, to warrant a different and plausible (even if extreme) hypothesis: We suggest the view that the Stability Pact is a public social norm, obeyed by countries because of the fear of reputation losses. Our simple model shows that reputation issues may cause the emergence of a stable but inferior equilibrium. Within this framework, the enlargement to more undisciplined countries may worsen the problems posed by the Pact. JEL Classification: D63, D71, E62, E63.
References listed on IDEAS
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- Ardagna Silvia & Caselli Francesco & Lane Timothy, 2007.
"Fiscal Discipline and the Cost of Public Debt Service: Some Estimates for OECD Countries,"
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- Ardagna, Silvia & Caselli, Francesco & Lane, Timothy, 2004. "Fiscal Discipline and the Cost of Public Debt Service: Some Estimates for OECD Countries," CEPR Discussion Papers 4661, C.E.P.R. Discussion Papers.
- Ardagna, Silvia & Lane, Timothy & Caselli, Francesco, 2007. "Fiscal Discipline and the Cost of Public Debt Service: Some Estimates for OECD Countries," Scholarly Articles 2579739, Harvard University Department of Economics.
- George A. Akerlof, 1980. "A Theory of Social Custom, of which Unemployment may be One Consequence," The Quarterly Journal of Economics, Oxford University Press, vol. 94(4), pages 749-775.
- George A. Akerlof, 1978. "A theory of social custom, of which unemployment may be one consequence," Special Studies Papers 118, Board of Governors of the Federal Reserve System (U.S.).
- Ardagna, Silvia & Caselli, Francesco & Lane, Timothy, 2004. "Fiscal discipline and the cost of public dept service: some estiames for OECD countries," Working Paper Series 411, European Central Bank.
- Alberto Alesina & Roberto Perotti, 1997. "Fiscal Adjustments in OECD Countries: Composition and Macroeconomic Effects," IMF Staff Papers, Palgrave Macmillan, vol. 44(2), pages 210-248, June.
- Andersen, Torben M. & Sorensen, Jan Rose, 1995. "Unemployment and fiscal policy in an economic and monetary union," European Journal of Political Economy, Elsevier, vol. 11(1), pages 27-43, March. Full references (including those not matched with items on IDEAS)
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