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Title:The EMU Consolidation Game - or: Does 3.0 Really Mean 3.0? PDF Logo
Authors:Heinemann, Friedrich
Issue Date:1998
Series/Report no.:ZEW Discussion Papers 98-01
Abstract:Within the economic profession, it is a widely held view that the fiscal criteria of the Maastricht treaty are arbitrary numbers without economic foundation. Much of this criticism seems to overlook an important aspect - the strategic dimension of the criteria. This paper focuses on one particular question out of this broad strategic complex: How do the criteria change the fiscal bargaining situation on the national level? For this purpose, a bargaining game between a national finance minister and an interest group over budget consolidation is designed. The purpose of this paper is twofold : On the one hand the analysis should contribute to a better understanding of the strategic effects of the fiscal criteria in the pre-EMU period. On the other hand it is to provide insights helpful for the construction of credible and strategically consistent debt limits in the time after the introduction of the Euro.
Subjects:European Monetary Union
Convergence Criteria
Budget Consolidation
Boundary
Signalling
Conditionality
JEL:H60
F33
D72
C78
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des ZEW
ZEW Discussion Papers

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