Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/72393
Authors: 
Bohn, Frank
Year of Publication: 
2005
Series/Report no.: 
Working Paper Series, UCD Centre for Economic Research 05/06
Abstract: 
It is generally believed that fiscal consolidations should occur prior to a country's admission to the European Monetary Union (EMU). This paper argues that the fiscal Maastricht Criteria require badly timed, costly adjustments while not guaranteeing sustained fiscal restraint. An effective Stability Pact is not only necessary, but should replace the Maastricht Criteria altogether. These conclusions are based on simulations scrutinising the effects both of contractionary fiscal policies and of joining a monetary union. In a case study type analysis it is shown that there is a strong case for both policy changes to happen at the same time.
Subjects: 
transition to a monetary union
fiscal policy
European Monetary Union
regime change
simulation
MULTIMOD
JEL: 
E63
F42
F47
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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