How to spend 750 billion euro? Applying sacrifice theory to determine Covid-19 compensations in the EU

Alfred Greiner and Benjamin Owusu ()
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Benjamin Owusu: Bielefeld University

Economics Bulletin, 2020, vol. 40, issue 3, 2457-2470

Abstract: In this note we consider an economic union consisting of sovereign national states. An asymmetric shock hits the union and as a result it decides to set up a fund in order to compensate the countries in the union. We show how sacriï¬ ce theory can be used to determine the compensation payments for the countries in a way such that the relative damages after compensation are equal across countries. Finally, we apply our results to determine the Covid-19 compensation payments in the EU

Keywords: Public transfers; sacriï¬ ce theory; economic union (search for similar items in EconPapers)
JEL-codes: H1 H8 (search for similar items in EconPapers)
Date: 2020-09-24
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Citations: View citations in EconPapers (1)

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