IDEAS home Printed from
   My bibliography  Save this paper

EMU and Politically-Induced Output Variability: Can the Stability and Growth Pack Help?


  • Robert Ackrill


  • Dean Garratt


Rogoff, 1985, suggested that central bank independence would lead to lower inflation but greater output variability. Alesina and Gatti, 1995, demonstrated Rogoff’s work was partial by only considering economic sources of output variability. By including political factors, circumstances could be identified when making a central bank independent could reduce both inflation and output variability. In EMU, however, there is no choice about central bank independence. Starting with a review of the analysis presented by Alesina and Gatti, this paper suggests national fiscal policies could also be a source of politically-induced output variability. It reinterprets the analysis of Alesina and Gatti and identifies circumstances when the Stability and Growth Pact could help to reduce output variability in EMU.

Suggested Citation

  • Robert Ackrill & Dean Garratt, 1998. "EMU and Politically-Induced Output Variability: Can the Stability and Growth Pack Help?," Discussion Papers in Economics 98/2, Department of Economics, University of Leicester.
  • Handle: RePEc:lec:leecon:98/2

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Lee, Lung-Fei, 1997. "A smooth likelihood simulator for dynamic disequilibrium models," Journal of Econometrics, Elsevier, vol. 78(2), pages 257-294, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lec:leecon:98/2. 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: (Mrs. Alexandra Mazzuoccolo). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.