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Title:Fiscal indulgence in Central Europe: loss of the external anchor? PDF Logo
Authors:Berger, Helge
Kopits, George
Székely, István P.
Issue Date:2006
Series/Report no.:Diskussionsbeiträge des Fachbereichs Wirtschaftswissenschaft der Freien Universität Berlin 2006/9
Abstract:In recent years, fiscal performance in Central Europe has steadily deteriorated, in contrast to the improvement in the Baltics. This paper explores the determinants of such differences among countries on the path to EU accession. Regression estimates suggest that economic and institutional fundamentals do not provide a full explanation. An alternative explanation lies in the political economy of the accession process, and a game-theoretic model illustrates why a country with a stronger bargaining position might have an incentive to deviate from convergence to the Maastricht criteria. The model generates alternative fiscal policy regimes—allowing for regime shifts—depending on country characteristics and EU policies.
Subjects:Fiscal policy
EU economic and monetary union
game-theoretic approach
JEL:H6
C70
ISBN:3938369345
Document Type:Working Paper
Appears in Collections:Diskussionsbeiträge, FB Wirtschaftswissenschaft, FU Berlin

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