Fiscal Policy and the European Stability and Growth Pact: Between macroeconomic necessities and economic- and fiscal-policy requirements

Willi Leibfritz, Rolf Horst Dumke, Albert Müller, Wolfgang Ochel (wolfgang.ochel@hotmail.de), Michael Reutter and Frank Westermann

in ifo Beiträge zur Wirtschaftsforschung from ifo Institute - Leibniz Institute for Economic Research at the University of Munich

Abstract: The design of fiscal policy is subject of this study of the countries of the EU and the European Monetary Union commissioned by the Federal Ministry of Finance. In order to avoid inappropriate fiscal policies in individual member states that have a negative effect on the other countries, the member states have agreed to comply with specific rules laid out in the Maastricht Treaty and in the European Stability and Growth Pact. This study presents the possibilities and the limits of fiscal policy in reaching macroeconomic goals, in particular the improvement of the growth and employment conditions. It examines the interaction between fiscal policy and other macro policies, in particular monetary policy and the structural policy. Methodologically the analyses are based on a study of the literature and on own empirical analyses. In addition, a statistical model was developed within the framework of this study in order to examine the effects that past fiscal policy measures in Germany had. The results of this model are also compared with the results of a similar model for the United States.

JEL-codes: E50 E60 F30 H50 H60 (search for similar items in EconPapers)
Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ces:ifobei:5

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