THE DISCRETIONARY FISCAL POLICY IN THE EUROPEAN ECONOMIC AND MONETARY UNION

Cristian Pana

The Annals of the "Stefan cel Mare" University of Suceava. Fascicle of The Faculty of Economics and Public Administration, 2009, vol. 9, issue 2(10), 206-212

Abstract: This paper reviews the macroeconomic use of national fiscal policy within the European Economic and Monetary Union and the effect the discretionary fiscal policy has on the economic activity. It also considers the difference between policy intentions, as formulated or perceived in real time, and actual outturns, and possible reasons for the gap between the two. The analysis of the stance of national fiscal policies finds evidence that the quality of fiscal policies has improved in two ways: they are more clearly countercyclical – or less procyclical – and they are more readily used to restore competitiveness than to attempt to boost demand when competitiveness is eroded. In Sections IV and V there are presented two successful cases of discretionary fiscal stabilisation, respectively the lessons to be drawn.

Keywords: Fiscal policy; fiscal stabilization; Stability and Growth Pact; monetary union; euro; EMU. (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:scm:ausvfe:v:9:y:2009:i:2(10):p:206-212

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