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Structural reforms and budget deficits in a monetary union: a strategic approach

  • Campoy, Juan Cristobal
  • Negrete, Juan Carlos

    (Departamentos y Servicios::Departamentos de la UMU::Fundamentos del Análisis Económico)

This paper explores the interrelations between budget deficits and structural reforms in a monetary union. The analysis considers the international spillovers generated by both policies. We show that efforts to achieve fiscal policy coordination within the Eurozone reduce member countries’ incentives to carry out much-needed structural reforms. As a consequence, this cooperation can turn out to be welfare-reducting if it not extended to the implementation of structural reforms.

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File URL: http://digitum.um.es/xmlui/bitstream/10201/5504/1/WPUMUFAE.2009.08.pdf?sequence=1
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Paper provided by DIGITUM. Universidad de Murcia in its series UMUFAE Economics Working Papers with number 5504.

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Length: 31
Date of creation: Sep 2009
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Handle: RePEc:mur:wpaper:5504
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