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Asymétries budgétaires dans la zone euro : un essai de modélisation du Pacte de Stabilité

Abstract : In this paper, we show how the Stability and Growth Pact can lead to a suboptimal macroeconomic equilibrium. Eurozone countries with sound public finances can undergo a sharp reduction in their fiscal margins for manoeuvre because of the inability of countries with unbalanced public finances to implement an active fiscal policy. This negative feedback effect also applies to the central bank: it may have to get more involved in the macroeconomic stabilisation of the whole EU. To illustrate these feedback effects, we use a two-country model in a monetary union with dynamics. Households' behaviour incorporates a wealth component. This enables a precise study of the different implications of public debt growth on the design of monetary and fiscal policies from the short to the long run. At last, gains from co-ordination are substantial and grow with the level of the feedback effects.
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Submitted on : Friday, November 5, 2021 - 1:19:21 PM
Last modification on : Tuesday, June 21, 2022 - 3:15:41 PM

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Jérôme Creel. Asymétries budgétaires dans la zone euro : un essai de modélisation du Pacte de Stabilité. Revue Française d'Economie, 2002, 16 (3), pp.91-127. ⟨10.3406/rfeco.2002.1515⟩. ⟨hal-03416852⟩

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