Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/40310
Authors: 
Buchmüller, Patrik
Marte, Andreas
Year of Publication: 
2003
Series/Report no.: 
Tübinger Diskussionsbeitrag 267
Abstract: 
The Stability and Growth Pact (SGP) intends to increase fiscal prudence among the members of the European Monetary Union. This may be useful on grounds of political economy if national decision-making leads to inefficiently high public deficits. However, the SGP in its present form is not sufficiently stringent to prevent excessive deficits. Even worse, it is shown that its relevance is constantly eroded. To save the SGP sanctions have to be imposed if the nominal deficit criterion is violated. Relying on structurally adjusted deficits would make the SGP less transparent and reduce pressure on national governments to balance their budgets even further.
Subjects: 
European Monetary Union
Stability and Growth Pact
Public Deficits
JEL: 
E62
F36
H62
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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