Maastricht criteria versus stability pact

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Title: Maastricht criteria versus stability pact
Authors: Bohn, Frank
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Date: Mar-2005
Abstract: It is generally believed that fiscal consolidations should occur prior to a country's admission to the European Monetary Union (EMU). This paper argues that the fiscal Maastricht Criteria require badly timed, costly adjustments while not guaranteeing sustained Fiscal restraint. An effective Stability Pact is not only necessary, but should replace the Maastricht Criteria altogether. These conclusions are based on simulations scrutinising the effects both of contractionary fiscal policies and of joining a monetary union. In a case study type analysis it is shown that there is a strong case for both policy changes to happen at the same time.
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Series/Report no.: UCD Centre for Economic Research Working Paper Series; WP05/06
Keywords: Transition to a monetary unionEuropean Monetary UnionFiscal policyRegime changeMULTIMODSimulation
Subject LCSH: Economic and Monetary Union--Membership
Fiscal policy
Monetary unions
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Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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