EconPapers    
Economics at your fingertips  
 

Will the SGP Ever Be Breached?

Ray Barrell and Karen Dury

Chapter 10 in The Stability and Growth Pact, 2001, pp 235-255 from Palgrave Macmillan

Abstract: Abstract The European Union economies have embarked on a programme of economic transformation that changes their mode of governance. Rules for monetary policy-making have been fundamentally altered for euro area members and all fifteen are variously bound by Treaty or Protocol to fiscal programmes that have significant implications for the flexibility with which they operate stabilisation policy. The Stability and Growth Pact (SGP) puts clear limits on the size of deficits that can be run, and has a rather loose system of fines associated with it. In this chapter we focus on the likelihood of member countries breaching this criteria and the extent to which changes in monetary policy affect this outcome. In particular we investigate what effects different types of simple monetary policy rules have on a country’s ability to keep within the SGP criteria. One of the most common criticisms of the SGP is that it may be too binding in that governments will be unable to use fiscal stabilisation policies. This chapter throws light on the scope for fiscal activism in stabilising individual EMU economies.

Keywords: Interest Rate; Monetary Policy; Fiscal Policy; Euro Area; Budget Deficit (search for similar items in EconPapers)
Date: 2001
References: Add references at CitEc
Citations: View citations in EconPapers (10)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
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:pal:palchp:978-0-230-62926-4_10

Ordering information: This item can be ordered from
http://www.palgrave.com/9780230629264

DOI: 10.1057/9780230629264_10

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2025-04-01
Handle: RePEc:pal:palchp:978-0-230-62926-4_10