Inflation Divergence and Public Deficits In an Monetary Union

Abstract : We reconsider the link between domestic public debts and average and domestic inflation rates in a monetary union, using a modified version of a model by B-V (2002). It is thus possible to show that the causation between the inflation dynamics and the public finances might go from the former to the latter. We are thus able to tackle the issue of persistently divergent inflation rates within the euro area. We also demonstrate that the homogeneous fiscal rules defined in the Stability and Growth Pact are ill-suited and might even be counterproductive. This conclusion is all the more true as the EU is on the eve of enlargement towards the CEECs: our results show that imposing homogeneous fiscal rules to the CEECs may prove disruptive.
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Pré-publication, Document de travail
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Soumis le : mercredi 17 septembre 2014 - 17:16:49
Dernière modification le : lundi 17 juin 2019 - 18:26:09
Archivage à long terme le : jeudi 18 décembre 2014 - 11:55:47


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  • HAL Id : hal-01065062, version 1
  • SCIENCESPO : 2441/2302



Jérôme Creel, Jacques Le Cacheux. Inflation Divergence and Public Deficits In an Monetary Union. 2003. ⟨hal-01065062⟩



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