Economic spillover and policy coordination in the Euro area

Klaus Weyerstrass, Johannes Jaenicke, Reinhard Neck (), Gottfried Haber, Bas van Aarle, Koen Schoors, Niko Gobbin and Peter Claeys

No 246, European Economy - Economic Papers 2008 - 2015 from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: There is a broad consensus among economists that the increased interdependence that comes from sharing a common currency and a single monetary policy justifies some degree of economic policy coordination between euro area Member States. However, empirical studies have, thus far, offered inconclusive evidence regarding the comparative importance of different types of economic spillover. Accordingly, estimates of the welfare gains from economic policy coordination in the euro area have varied considerably. This study presents original research on the nature of economic interdependence under European Economic and Monetary Union. Its main contribution is to provide plausible estimates of the sign and size of economic spillover in the euro area and the welfare gains from economic policy coordination. These results are relevant for the European Commission's ongoing work on strengthening economic governance in the context of the Stability and Growth Pact and the Lisbon Strategy.

Keywords: budgetary spillover; economic interdependence; Stability and Growth Pact; Lisbon Strategy; Haber; van Aarle; Schoors; Gobbin; Claeys (search for similar items in EconPapers)
Pages: 289 pages
Date: 2006-03
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Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:euf:ecopap:0246

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