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Asymétries budgétaires dans la zone euro : un essai de modélisation du Pacte de Stabilité

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  • Jérôme Creel

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

Abstract

In this paper, we show how the Stability and Growth Pact can lead to a suboptimal macroeconomic equilibrium. Eurozone countries with sound public finances can undergo a sharp reduction in their fiscal margins for manoeuvre because of the inability of countries with unbalanced public finances to implement an active fiscal policy. This negative feedback effect also applies to the central bank: it may have to get more involved in the macroeconomic stabilisation of the whole EU. To illustrate these feedback effects, we use a two-country model in a monetary union with dynamics. Households' behaviour incorporates a wealth component. This enables a precise study of the different implications of public debt growth on the design of monetary and fiscal policies from the short to the long run. At last, gains from co-ordination are substantial and grow with the level of the feedback effects.

Suggested Citation

  • Jérôme Creel, 2002. "Asymétries budgétaires dans la zone euro : un essai de modélisation du Pacte de Stabilité," Post-Print hal-03416852, HAL.
    • Handle: RePEc:hal:journl:hal-03416852
    DOI: 10.3406/rfeco.2002.1515
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    Cited by:

    1. Cornel Oros, 2009. "Economic Governance in an Asymmetric Monetary Union: A Fiscal Policy Game Analysis," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 39-60.
    2. Séverine Menguy, 2005. "Hétérogénéité structurelle des pays membres et conflit dobjectifs entre les autorités économiques dans l'UEM," Économie et Prévision, Programme National Persée, vol. 169(3), pages 41-58.
    3. Schalck, Christophe, 2006. "Coordination des Politiques Budgétaires dans une Union Monétaires Hétérogène: Modélisation et Application à l'UEM Coordination of Budgetary Policies in a Heterogeneous Monetary Union: Modelisation and," MPRA Paper 1435, University Library of Munich, Germany.
    4. Cornel Oros, 2008. "Macroeconomic stabilization in a heterogeneous monetary union: some insights into the effects of fiscal policy coordination," Economics Bulletin, AccessEcon, vol. 5(34), pages 1-12.
    5. Schalck, Christophe, 2006. "Règles Budgétaires et Gestion du Policy-Mix dans l'UEM Budgetary Rules and Management of the Policy-Mix in the UME," MPRA Paper 1434, University Library of Munich, Germany, revised Oct 2006.

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