Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/31975 
Year of Publication: 
2006
Series/Report no.: 
Diskussionsbeiträge No. 128
Publisher: 
Georg-August-Universität Göttingen, Volkswirtschaftliches Seminar, Göttingen
Abstract: 
The Stability and Growth Pact is one of the constituent pillars of the European Monetary Union. Though, meanwhile it is obvious that it will not be able to limit fiscal deficits of the member states. For this reason in this paper Coase's thinking in institutional alternatives is applied to find a better way to increase the incentives for more fiscal stability. We present and discuss tradable deficit permits comprising market-orientated incentives for fiscal stability. It is shown that tradable deficit permits are superior from a politico-economical view as well as with regard to allocative efficiency.
Subjects: 
stability and growth pact
tradable deficit permits
monetary union
JEL: 
E5
E6
H6
Document Type: 
Working Paper

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