The Myth (or Folly) of the 3 Percent Deficit/GDP Maastricht 'Parameter.'
A relation is presented defining the boundary, algebraically and geometrically, to the sustainability area of public finance. The relation (and area) involve three magnitudes: deficit/GDP, debt/GDP, and rate of growth. It is shown that the parameters stated in the famous Annex to the Maastricht Treaty (60 percent for the debt/GDP ratio and 3 percent for the deficit/GDP ratio) represent only one particular point on the above mentioned boundary relation to the sustainability area. There exists an infinite number of other points sharing the same characteristics. On the basis of the OECD data referring to the end of 1996, it is shown that all major European countries find themselves outside the sustainability area, except Belgium and Italy, i.e., exactly the opposite of what is widely believed to be the case in current discussions. Copyright 1998 by Oxford University Press.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 22 (1998)
Issue (Month): 1 (January)
|Contact details of provider:|| Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK|
Fax: 01865 267 985
Web page: http://www.cje.oupjournals.org/
|Order Information:||Web: http://www.oup.co.uk/journals|
When requesting a correction, please mention this item's handle: RePEc:oup:cambje:v:22:y:1998:i:1:p:103-16. 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: (Oxford University Press)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.