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The Return of Fiscal Policy and the Euro Area Fiscal Rule

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  • Vítor Constâncio

    (Lisbon School of Economics and Management (ISEG))

Abstract

The text describes the theoretical developments of the assignment rules regarding fiscal and monetary policies and the respective roles in macroeconomics stabilisation. Monetary policy emerged as the dominant policy, reducing the active macro-role of fiscal policy to taking care of debt sustainability. This consensus started to change, and a new view has appeared, giving a more active role to fiscal policy. The article concludes with a brief analysis of fiscal rules, followed by a discussion about the European Union fiscal framework, and its necessary revision.

Suggested Citation

  • Vítor Constâncio, 2020. "The Return of Fiscal Policy and the Euro Area Fiscal Rule," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 62(3), pages 358-372, September.
    • Handle: RePEc:pal:compes:v:62:y:2020:i:3:d:10.1057_s41294-020-00122-3
    DOI: 10.1057/s41294-020-00122-3
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    Cited by:

    1. Andrea Boitani & Salvatore Perdichizzi & Chiara Punzo, 2022. "Nonlinearities and expenditure multipliers in the Eurozone [Tales of fiscal adjustment]," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 31(2), pages 552-575.
    2. Sebastian Barnes, 2022. "EU Fiscal Governance Reforms: A Perspective of Independent Fiscal Institutions," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 57(1), pages 21-25, January.
    3. Barnes, Sebastian & Oliinyk, Inna, 2021. "The EU’s economic governance review: Road-testing alternative fiscal rules?," CEPS Papers 34802, Centre for European Policy Studies.

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    More about this item

    Keywords

    Fiscal Policy; Fiscal Rules; Monetary Policy; European Monetary Union; EU Stability and Growth Pact;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System

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