EuropeÕs Deficit Free Riders: A Panel Data Analysis

Thierry Warin and Lindsay Wolff
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Lindsay Wolff: Department of Economics, Middlebury College, Vermont

European Political Economy Review, 2005, vol. 3, issue Spring, 5-17

Abstract: The paper proposes an empirical method to measure the free riding possibility of public deficits in Europe. We use a cross-sectional time-series analysis of differences in national public deficits since 1991, and we compare the evolution of deficits before and after the inception of the euro in 1999. Evidence is that the countries breaching the Stability and Growth Pact are not likely free riders, but rather leaders in terms of deficits. In this case, they may lead the march towards higher public deficits in Europe.

Keywords: Europe; Fiscal rule; Stability and Growth Pact (search for similar items in EconPapers)
JEL-codes: B41 H62 O47 P51 (search for similar items in EconPapers)
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:epe:journl:v:3:y:2005:i:spring:p:5-17

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