Fiscal Aspects of European Monetary Integration

by Edited by Andrew Hughes Hallett , Michael M. Hutchison , Svend E. Hougaard Jensen

• ISBN13: 9780521651622
• ISBN10: 052165162X
• Format: Hardcover
• Copyright: 1999-10-28
• Publisher: Cambridge University Press

Summary

Monetary union in Europe started in 1999. The fiscal policy implications are, in many ways, more complex than the monetary issues, yet very little has been written on them. This book contains eleven papers and three review essays, which analyse a spectrum of empirical, theoretical, institutional and political aspects of the design and impact of fiscal policy in EMU. The contributors are some of the most experienced analysts in the field. Topics covered include the need for and consequences of fiscal coordination, constraints on national deficits and debt levels (the Stability Pact), and the role of fiscal federalism and insurance. The importance of coordinating fiscal and monetary policies is also considered in depth. As long as these strategic and institutional aspects remain imperfectly understood, EMU will not be able to function to its full advantage and may suffer periods of instability or weakness.

Table of Contents

1. Fiscal aspects of European monetary integration: an introduction Andrew Hughes Hallett, Michael M. Hutchison and Svend E. Hougaard Jensen

Part I. Institutions and Political Economy: 2. Institutions and fiscal policy in EMU Niels Thygesen

3. A political economy analysis of the Maastricht and Stability Pact fiscal criteria Thomas F. Willett

Part II. Automatic Stabilizers in a Monetary Union: 4. Budgetary norms and EMU Torben M. Andersen and Robert Dogonowski

5. Regional adjustment and the welfare economics of monetary unification: what are the benefits of exchange rate flexibility and fiscal insurance? Kenneth M. Kletzer

6. Nominal stability, real convergence, and fiscal transfers in a monetary union Svend E. Hougaard Jensen

Discussion: Automatic Stabilizers and Fiscal Transfers Neil Rankin

Part III. The Stability and Growth: Pact 7. The Stability Pact: Trading-off Flexibility for Credibility? Michael Artis and Bernhard Winkler

8. The stability and growth pact in a model with politically-induced deficit biases Roel M. W. J. Beetsma

9. Implications of the Growth and Stability Pact: why the growth element is important Andrew Hughes Hallett and Peter McAdam

Discussion: the Stability Pact and Fiscal Policy Clas Wihlborg

Part IV. Asymmetric Business Cycles and Fiscal Linkages in Europe: 10. Costs of EMU and economic convergence Michael Bergman and Michael M. Hutchison

11. Fiscal consolidation in Europe: some empirical issues Christopher Allsopp, Warwick McKibben and David Vines

12. Could the ins hurt the outs? a welfare analysis of International Financial Fiscal Links Giancarlo Corsetti and Paolo Pesenti

Discussion: insiders and outsiders in EMU Paul De Grauwe.