Aspects of Economic Governance in the Euro Area: Restoring Internal and External Balances

Nicos Christodoulakis

Politica economica, 2016, issue 3, 489-510

Abstract: The Economic Governance for the Euro Area is envisaged to be both an overseeing framework that enables the timely identification of oncoming trouble, as well as a correction mechanism that puts an economy hit by major shocks back in order. The paper discusses the relevance of prevention and correction mechanisms, and finds that exclusively focusing fiscal policy on debt sustainability may be misleading for all and more harmful to the weaker economies in particular, unless internal and external imbalances are taken into account. The fiscal rule should be designed so as to be compatible with debt sustainability in the medium run but also allowed to respond to short term output and current account fluctuations. The micro-management of fiscal components with regards to political feasibility and social equity is also discussed.

Keywords: Euro Area; Public Debt; Fiscal Policy; External Balance. (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.rivisteweb.it/download/article/10.1429/85008 (application/pdf)
https://www.rivisteweb.it/doi/10.1429/85008 (text/html)
Access to full text is restricted to subscribers

Related works:
Working Paper: Aspects of economic governance in the Euro area: restoring internal and external balances (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mul:je8794:doi:10.1429/85008:y:2016:i:3:p:489-510

Access Statistics for this article

Politica economica is currently edited by Giuseppe Marotta

More articles in Politica economica from Società editrice il Mulino
Bibliographic data for series maintained by ().