The "New" Stability and Growth Pact: More Flexible, Less Stupid?
Since the beginning of the European single currency project, the adoption of fiscal binding rules, restraining the use of the single policy instrument left for national authorities, has been challenged by many authors and politicians. The discussion has been rekindled in recent years, following a period of economic recession or stagnation in several Member-Countries and some criticisms linking the Stability and Growth Pact (SGP) to the general economic situation. Some of the questions raised by those who criticised the initial framework for fiscal discipline may have been taken into account in the recent revision of the SGP (March 2005), which followed the suspension of the Pact for Germany and France and eventually made the SGP more flexible and “less stupid”. In this paper, we evaluate the changes contained in the “new” SGP, by taking account of the properties for ideal fiscal rules put forward by Kopits and Symansky (1998) and comparing with some recently published studies on the same topic. The main result of our analysis points towards a clear increase in flexibility together with the probable emergence of new enforcement problems. In this context, an insufficient output in terms of fiscal discipline could arise, leading to the need for new improvements within the European framework for the definition and implementation of national fiscal policies.
(This abstract was borrowed from another version of this item.)
Volume (Year): 42 (2007)
Issue (Month): 4 (July)
|Contact details of provider:|| Web page: http://www.springer.com|
Web page: http://www.zbw.eu/de/
Web page: https://www.ceps.eu/
|Order Information:||Web: http://link.springer.de/orders.htm|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Muscatelli, V. Anton & Tirelli, Patrizio & Trecroci, Carmine, 2004.
"Fiscal and monetary policy interactions: Empirical evidence and optimal policy using a structural New-Keynesian model,"
Journal of Macroeconomics,
Elsevier, vol. 26(2), pages 257-280, June.
- Anton Muscatelli & Patrizio Tirelli & Carmine Trecroci, 2003. "Fiscal and Monetary Policy Interactions: Empirical Evidence and Optimal Policy Using a Structural New Keynesian Model," CESifo Working Paper Series 1060, CESifo Group Munich.
- Willem H. Buiter, 2006. "The 'Sense and Nonsense of Maastricht' Revisited: What Have we Learnt about Stabilization in EMU?," Journal of Common Market Studies, Wiley Blackwell, vol. 44, pages 687-710, November.
- Buiter, Willem H., 2005. "The 'Sense and Nonsense of Maastricht' Revisited: What Have We Learnt About Stabilization In EMU?," CEPR Discussion Papers 5405, C.E.P.R. Discussion Papers.
- Marcus Miller & Mark Salmon, 1985. "Policy Coordination and Dynamic Games," NBER Chapters,in: International Economic Policy Coordination, pages 184-227 National Bureau of Economic Research, Inc.
- Alessandra Casella, 1999. "Tradable deficit permits:efficient implementation of the Stability Pact in the European Monetary Union," Economic Policy, CEPR;CES;MSH, vol. 14(29), pages 321-362, October.
- Alessandra Casella, 1999. "Tradable Deficit Permits: Efficient Implementation of the Stability Pacin the European Monetary Union," NBER Working Papers 7278, National Bureau of Economic Research, Inc.
- Tabellini, Guido, 1990. "Domestic politics and the international coordination of fiscal policies," Journal of International Economics, Elsevier, vol. 28(3-4), pages 245-265, May.
- Tabellini, Guido, 1988. "Domestic Politics and the International Coordination of Fiscal Policies," CEPR Discussion Papers 226, C.E.P.R. Discussion Papers.
- Guido Tabellini, 1988. "Domestic Politics and the International Coordination of Fiscal Policies," UCLA Economics Working Papers 529, UCLA Department of Economics.
- Uhlig, H.F.H.V.S., 2002. "One Money, But Many Fiscal Policies in Europe : What are the Consequences?," Discussion Paper 2002-32, Tilburg University, Center for Economic Research.
- Uhlig, Harald, 2002. "One Money, but Many Fiscal Policies in Europe: What Are the Consequences?," CEPR Discussion Papers 3296, C.E.P.R. Discussion Papers.
- 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.
- Jérôme Creel, 2003. "Ranking Fiscal Policy Rules: the Golden Rule of Public Finance vs. the Stability and Growth Pact," Working Papers hal-00972778, HAL.
- Jerome Creel, 2003. "Ranking Fiscal Policy Rules: the Golden Rule of Public Finance vs. the Stability and Growth Pact," Documents de Travail de l'OFCE 2003-04, Observatoire Francais des Conjonctures Economiques (OFCE).
- Marco Buti & Sylvester Eijffinger & Daniele Franco, 2003. "Revisiting EMU's Stability Pact: A Pragmatic Way Forward," Oxford Review of Economic Policy, Oxford University Press, vol. 19(1), pages 100-111.
- Eijffinger, S.C.W. & Buti, M. & Franco, D., 2003. "Revisiting EMU's stability pact : A pragmatic way forward," Other publications TiSEM 2074fa3c-362a-4366-a649-5, Tilburg University, School of Economics and Management.
- Buiter, W.H. & Corsetti, G. & Roubini, N., 1992. "Excessive Deficits: Sense and Nonsence in the Treaty of Maastricht," Papers 674, Yale - Economic Growth Center.
- Buiter, Willem H. & Corsetti, Giancarlo & Roubini, Nouriel, 1992. "`Excessive Deficits': Sense and Nonsense in the Treaty of Maastricht," CEPR Discussion Papers 750, C.E.P.R. Discussion Papers.
- Hamada, Koichi, 1976. "A Strategic Analysis of Monetary Interdependence," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 677-700, August.
- Buti, M. & Eijffinger, S.C.W. & Franco, D., 2005. "The Stability pact Pains : A Forward-Looking Assessment of the Reform Debate," Discussion Paper 2005-101, Tilburg University, Center for Economic Research.
- Buti, Marco & Eijffinger, Sylvester C W & Franco, Daniele, 2005. "The Stability Pact Pains: A Forward-Looking Assessment of the Reform Debate," CEPR Discussion Papers 5216, C.E.P.R. Discussion Papers.
- Frankel, Jeffrey A & Rockett, Katharine E, 1988. "International Macroeconomic Policy Coordination When Policymakers Do Not Agree on the True Model," American Economic Review, American Economic Association, vol. 78(3), pages 318-340, June.
- George Kopits & Steven A. Symansky, 1998. "Fiscal Policy Rules," IMF Occasional Papers 162, International Monetary Fund.
- Jurg Niehans, 1968. "Monetary and Fiscal Policies in Open Economies under Fixed Exchange Rates: An Optimizing Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 893-893.
- Simon Wren-Lewis, 2003. "Changing the Rules," New Economy, Institute for Public Policy Research, vol. 10(2), pages 73-78, 06. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:spr:intere:v:42:y:2007:i:4:p:218-225. 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: (Sonal Shukla)or (Rebekah McClure)
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.