Fiscal transfers without moral hazard?

Roel Beetsma, Simone Cima and Jacopo Cimadomo

Research Bulletin, 2018, vol. 48

Abstract: We present a euro area central stabilisation scheme that is relatively free from adverse incentives (moral hazard), because transfer payments to Member States are based on changes in world trade in the various economic sectors. Indeed, these changes are largely driven by external forces and therefore not directly controlled by individual governments or countries. The transfers generated by our scheme tend to be temporary, countercyclical and larger when economies are less diversified. Finally, the scheme is quite robust to revisions in the underlying export data. JEL Classification: E32, E62, E63

Keywords: central fiscal capacity; EMU; exports; moral hazard (search for similar items in EconPapers)
Date: 2018-07
Note: 352854
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.ecb.europa.eu//pub/economic-research/r ... ecb.rb180711.en.html (text/html)
https://www.ecb.europa.eu//pub/economic-research/r ... /ecb.rb180711.en.pdf (application/pdf)

Related works:
Journal Article: Fiscal Transfers without Moral Hazard? (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbrbu:2018:0048:

Access Statistics for this article

More articles in Research Bulletin from European Central Bank 60640 Frankfurt am Main, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Official Publications ().