The Impact of EMU on European Transition Economies: Commitment, institutional Capacity and the Monetary-Fiscal Mix

David Begg

No wp-2000-179, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: An interesting theory of transition must give a convincing account of structural adjustment and supply side improvement. In this paper, I discuss the incentives for government to undertake costly supply side improvement and how these relate to incentives governing the design of monetary and fiscal policy during transition. The government cares about deviations of inflation, output and government spending from their ideal levels, is subject to a budget constraint in which inflation yields some real revenue, and recognizes the distortionary effects of excess levels of taxation.

Keywords: Business cycles; Fiscal policy; International economic relations; Monetary policy (search for similar items in EconPapers)
Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:unu:wpaper:wp-2000-179

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