Arbeitspapier
Euro Membership and Fiscal Reaction Functions
The paper uses fiscal reaction functions for a panel of euro-area countries to investigate whether euro membership has reduced the responsiveness of countries to shocks in the level of inherited debt compared to the period prior to succession to the euro. While we find some evidence for such a loss in prudence, the results are not robust to changes in the specification, such as an exclusion of Greece from the panel. This suggests that the current debt problems may result to a large extent from preexisting debt levels prior to entry or from a larger need for fiscal prudence in a common currency, while an adverse change in the fiscal reaction functions for most countries does not apply.
- Language
-
Englisch
- Bibliographic citation
-
Series: CESifo Working Paper ; No. 4255
- Classification
-
Wirtschaft
National Deficit; Surplus
Fiscal Policy
- Subject
-
debt sustainability
fiscal reaction function
euro area
- Event
-
Geistige Schöpfung
- (who)
-
Weichenrieder, Alfons
Zimmer, Jochen
- Event
-
Veröffentlichung
- (who)
-
Center for Economic Studies and ifo Institute (CESifo)
- (where)
-
Munich
- (when)
-
2013
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
This object is provided by:
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Weichenrieder, Alfons
- Zimmer, Jochen
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2013
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