The Effects of the European Economic and Monetary Union (EMU) on National Fiscal Sustainability

Francesco Mongelli

Open Economies Review, 1999, vol. 10, issue 1, 61 pages

Abstract: This paper presents a methodology to analyze the responsiveness of fiscal sustainability to the “endogenous fiscal discipline” that will be strengthened by the EMU. This discipline arises in response to the harmonization of tax systems, the loss of control of current and prospective money financing, and the deepening of financial market-based discipline. The model developed in this paper is a generalization of Blanchard's 1984 model, in which the interest rate is determined endogenously. This provides the framework to analyze more features of the linkage between sustainability and endogenous fiscal discipline. This paper also presents a new intratemporal fiscal sustainability index. Copyright Kluwer Academic Publishers 1999

Keywords: economic integration; tax harmonization; European Monetary Union (search for similar items in EconPapers)
Date: 1999
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Working Paper: The Effects of the European Economic and Monetary Union (EMU)on National Fiscal Sustainability (1996)
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DOI: 10.1023/A:1008348827248

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