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Stabilisation policy in emu: the case for more active fiscal policy

María Jesús Arroyo Fernández y Jorge Uxó González

ISBN: 978-84-96144-59-0

Colección: Observatorio de Economía Europea - Nº:

Nº de Páginas: 44

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Resumen:

For European countries, the monetary union has represented a decrease in their stabilising capacity derived from losing their monetary policy autonomy, which is now centred on the mean situation in the euro zone. Moreover, the contribution of fiscal policy to the cyclical stabilisation of national economies has been restricted by the Stability and Growth Pact. Although it does not rule out the possibility of anti-cyclical action in budgetary policies, it proposes the exclusive use of automatic stabilisers, but the power of this mechanism is not the same in the different EMU countries, differing according to the type of shock produced. This paper analyses the role that fiscal policy should play in the EMU in relation to short-term stability and the function of discretionary policies in conjunction with automatic stabilisers.
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