Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/128038
Authors: 
Lindbeck, Assar
Niepelt, Dirk
Year of Publication: 
2006
Series/Report no.: 
Working Paper, Study Center Gerzensee 06.03
Abstract: 
We analyze economic rationales for, and possible alternatives to, the Stability and Growth Pact (SGP). We identify various cross-country spillover effects and domestic policy failures as potential rationales. The two sets of problems suggest different corrective measures, and different measures than those applied in the context of SGP. We contrast the "legalistic" perspective adopted in the Pact with a more incentive-based approach and discuss how the legalistic perspective gives rise to enforcement problems in connection with the implementa- tion of the SGP's sanctions.
Subjects: 
Stability and Growth Pact
spillover effects
policy failures
Pigouvian taxes
enforcement of Stability Pact
JEL: 
E63
F33
F42
H60
Document Type: 
Working Paper

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