Fiscal Expectations on the Stability and Growth Pact: Evidence from Survey Data

Marcos Poplawski-Ribeiro and Jan-Christoph Rülke

Working Papers from CEPII research center

Abstract: The paper uses survey data to analyze whether the Stability and Growth Pact (SGP) has changed financial market’s expectations on government budget deficits in France, Germany, Italy, and the UK. Our findings indicate that accuracy of financial experts’ deficit forecasts has increased in France during the SGP. The Pact seems to have also promoted a gain in credibility of European Commission’s deficit forecasts in France, Italy, and in the UK, particularly after its reform in 2005 and up to December 2007. Nevertheless, the National Fiscal Authorities’ forecasts of France, Germany, and Italy seem to have not been credible among market experts during the SGP. These results suggest that additional measures could be taken in order to make the fiscal rules of the Pact more credible among market specialists.

Keywords: Expectations; Credibility; Stability and growth pact; Survey data (search for similar items in EconPapers)
JEL-codes: C33 E62 E65 H62 (search for similar items in EconPapers)
Date: 2010-03
New Economics Papers: this item is included in nep-eec and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:cii:cepidt:2010-05

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