Masten, Igor, Grdović Gnip, Ana, (2016), “Stress testing the EU fiscal framework”, VoxEU, 13 October
Fiscal policies in European Economic and Monetary Union states are being reinforced. This column argues that the cyclically adjusted budget balance will be an imprecise tool for measuring fiscal discipline, and structural deficit rules limits are too stringent. If the official methodology is used to trigger corrective fiscal contractions, it may increase macroeconomic instability.
Relevant Posts
- Alcidi, Cinzia, Thirion, Gilles, (2016), “Assessing the Euro Area’s Shock-Absorption Capacity: Risk sharing, consumption smoothing and fiscal policy”, CEPS Special Report No.146, September
- Claeys, Gregory, Darvas, Zsolt, Leandro, Alvaro, (2016), “A proposal to revive the European Fiscal Framework”, Bruegel, 29 Μarch