Euro-Area Fiscal Stance: From Theory to Practical Implementation

Agnès Benassy-Quere

No 6040, CESifo Working Paper Series from CESifo

Abstract: Despite large automatic stabilizers, the performance of the Euro area as a whole in terms of fiscal stabilization is relatively poor. This report argues that a meaningful fiscal stance for the Euro area should rely on the current account as a complement to the output gap, and be coordinated only in “exceptional” times, the usual bottom-up approach of fiscal policy remaining appropriate for “normal” times. In such setting, the European Fiscal Board would play a key role in advising the Commission on the existence of “exceptional” circumstances, on the adequate aggregate fiscal stance and on its desirable distribution across member states.

Keywords: fiscal stance; coordination of fiscal policies; euro area; European Fiscal Board (search for similar items in EconPapers)
JEL-codes: E62 F42 F45 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_6040

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