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Economic and Monetary Union in Europe and Constraints on National Budgetary Policies

Author

Listed:
  • A. Lans Bovenberg

    (International Monetary Fund)

  • Jeroen J. M. Kremers

    (International Monetary Fund)

  • Paul R. Masson

    (International Monetary Fund)

Abstract

The pros and cons of institutionalized constraints limiting the freedom of national budgetary policies within an economic and monetary union in Europe are reviewed. The issue is approached from three angles: the influence of EMU on budget discipline, intergenerational equity and intertemporal efficiency, and macroeconomic stabilization. The desirability of constraints on budgetary policy is related to the arrangements for EMU-wide monetary policy, the credibility of a no-bailout clause among member states, and progress in the area of supply-side policies.

Suggested Citation

  • A. Lans Bovenberg & Jeroen J. M. Kremers & Paul R. Masson, 1991. "Economic and Monetary Union in Europe and Constraints on National Budgetary Policies," IMF Staff Papers, Palgrave Macmillan, vol. 38(2), pages 374-398, June.
  • Handle: RePEc:pal:imfstp:v:38:y:1991:i:2:p:374-398
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    References listed on IDEAS

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    1. Bischoff, Charles W, 1969. "Hypothesis Testing and the Demand for Capital Goods," The Review of Economics and Statistics, MIT Press, vol. 51(3), pages 354-368, August.
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    Citations

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    Cited by:

    1. Reuven Glick & Michael Hutchison, 1993. "Fiscal policy in monetary unions: Implications for Europe," Open Economies Review, Springer, pages 39-65.
    2. Jérôme Creel, 2003. "Ranking Fiscal Policy Rules: the Golden Rule of Public Finance vs. the Stability and Growth Pact," Sciences Po publications 2003-04, Sciences Po.
    3. van Aarle, Bas & Lans Bovenberg, A. & Raith, Matthias G., 1997. "Is there a tragedy of a common central bank? A dynamic analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 21(2-3), pages 417-447.
    4. Wolf, Marvin, 2013. "Währungsunionen und Allmendeproblem," Hannover Economic Papers (HEP) dp-521, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    5. Jensen, Svend Erik Hougaard & Jensen, Lars Grue, 1995. "Debt, deficits and transition to EMU: A small country analysis," European Journal of Political Economy, Elsevier, vol. 11(1), pages 3-25, March.
    6. Heinemann, Friedrich, 1994. "Verschuldungsanreize in der Wirtschafts- und Währungsunion," ZEW Discussion Papers 94-02, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    7. Jérôme Creel & Henri Sterdyniak, 1995. "Les déficits publics en Europe. Causes, conséquences ou remèdes à la crise ?," Revue Économique, Programme National Persée, vol. 46(3), pages 645-656.
    8. Landon, Stuart & Smith, Constance E., 2007. "Government debt spillovers in a monetary union," The North American Journal of Economics and Finance, Elsevier, vol. 18(2), pages 135-154, August.
    9. Paul Masson & Catherine Pattillo, 2002. "Monetary Union in West Africa: An Agency of Restraint for Fiscal Policies?," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 11(3), pages 387-412, September.
    10. Jerome Creel & Gwenaelle Poilon, 2008. "Is public capital productive in Europe?," International Review of Applied Economics, Taylor & Francis Journals, pages 673-691.
    11. Heinemann, Friedrich, 1998. "EMU and fiscal discipline: the end of the depreciation threat," ZEW Discussion Papers 98-30, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    12. Pompeo Posta & Valeria Bonis, 2009. "Strategic Interactions Among Central Bank and National Fiscal Authorities in a Monetary Union Subject to Asymmetric Country Shocks," Open Economies Review, Springer, vol. 20(2), pages 241-263, April.
    13. Michel Aglietta & Merih Uctum, 1995. "Fiscal consolidation in Europe," Research Paper 9519, Federal Reserve Bank of New York.
    14. Campoy Juan Cristóbal & Negrete Juan C., 2010. "Structural Reforms and Budget Deficits in a Monetary Union: A Strategic Approach," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-31, July.
    15. Van Hecke, Annelore, 2013. "Vertical debt spillovers in EMU countries," Journal of International Money and Finance, Elsevier, vol. 37(C), pages 468-492.
    16. de Groof, R.J. & van Tuijl, M.A., 1992. "Commercial integration and fiscal policy in interdependent, financially integrated two-sector economies with real and nominal wage rigidity," Research Memorandum FEW 567, Tilburg University, School of Economics and Management.
    17. Maurice Obstfeld, 1997. "Europe's Gamble," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(2), pages 241-317.
    18. Alesina, Alberto Francesco, 1997. "Comments on 'Europe's Gamble' by M. Obstfeld," Scholarly Articles 12553725, Harvard University Department of Economics.

    More about this item

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • H6 - Public Economics - - National Budget, Deficit, and Debt

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