Could the stability and growth pact be substituted by the financial markets

Arbeitspapier

In the discussions of the need for fiscal rules and their usefulness in a monetary union researchers have not agreed on whether the financial markets have a sufficiently disciplining effect on the governments, which would mean that the fiscal rules are not necessary. This paper investigates whether the European Union's main fiscal rule, the Stability and Growth Pact, could be substituted by the financial markets, taking into account also the effects of the latest financial and economic crisis. Our findings suggest that there is certain interaction between the financial markets and the governments' decisions on the fiscal policies and that this reaction has become stronger after the beginning of the crisis. However, the institutional setup and market conditions in the European Union are such that this interaction is biased and thus we conclude that the Union needs to have fiscal rules.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IES Working Paper ; No. 30/2010

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; Financial Markets and the Macroeconomy ; Fiscal Policy ; National Deficit; Surplus ; State and Local Borrowing ; International Fiscal Issues; International Public Goods
• Thema: European Economic and Monetary Union ; Stability and Growth Pact ; Financial markets ; Fiscal rules ; Eurozone ; Europäischer Stabilitätsmechanismus ; Finanzmarkt ; Finanzpolitik ; Regelbindung ; EU-Staaten

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Výprachtická, Terezie
• Ereignis: Veröffentlichung
• (wer): Charles University in Prague, Institute of Economic Studies (IES)
• (wo): Prague
• (wann): 2010

Weitere Informationen

• Handle: http://hdl.handle.net/10419/83342
• Letzte Aktualisierung: 10.03.2025, 11:45 MEZ