Fiscal performance in monetary unions: How much austerity should be allowed? | Zendy

Carmen DíazRoldán | Zendy

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Fiscal performance in monetary unions: How much austerity should be allowed?

Author(s) -

Carmen DíazRoldán

Publication year - 2016

Publication title -

panoeconomicus

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.289

H-Index - 14

eISSN - 2217-2386

pISSN - 1452-595X

DOI - 10.2298/pan140730021d

Subject(s) - austerity , consolidation (business) , fiscal union , fiscal policy , economics , debt , fiscal imbalance , economic and monetary union , monetary economics , economic policy , monetary policy , macroeconomics , european union , finance , political science , politics , law

The effectiveness of fiscal policy becomes particularly relevant in the case of the member countries of a monetary union facing a sovereign debt crisis. In that environment, fiscal policy is constrained by the need to carry out fiscal consolidation and reduce debt levels. For that reason and with the purpose of anchoring fiscal discipline, the adoption of fiscal rules has become a central issue. In this paper we will analyse the management of fiscal policies in monetary unions, when the central bank and the fiscal authorities follow policy rules. The results are related to the conservativeness of the central bank, the degree of austerity of the fiscal authorities and the initial level of public debt

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