Fiscal transfers without moral hazard?
Simone Cima and
Jacopo Cimadomo ()
Research Bulletin, 2018, vol. 48
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)
References: View complete reference list from CitEc
Citations: Track citations by RSS feed
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)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
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 ().