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Vplyv fiškálnych pravidiel na úroveň ekonomického rastu v monetárnych úniách
[Impact of Fiscal Rules on Level of Economic Growth in Monetary Unions]

Author

Listed:
  • Matej Boór

Abstract

The present paper deals with the impact of supranational fiscal rules on economic growth through optimal government size and the BARS curve in monetary unions. Monetary unions introduce supranational fiscal rules to ensure fiscal sustainability of public finance and to eliminate the presence of free-riders in these country groupings. The main objective of the paper is therefore to illustrate how compliance with the supranational fiscal rules affects the level of economic growth under the conditions of the existence of the BARS curve in monetary unions. The paper confirms the existence of the BARS curve. It makes a quantification of the optimal government size in the East African Monetary Union (26.96% of GDP) and a subsequent identification of years when supranational fiscal rules prevented increase in public expenditures via debt financing and thus counteracted the decline in economic growth.

Suggested Citation

  • Matej Boór, 2020. "Vplyv fiškálnych pravidiel na úroveň ekonomického rastu v monetárnych úniách [Impact of Fiscal Rules on Level of Economic Growth in Monetary Unions]," Politická ekonomie, Prague University of Economics and Business, vol. 2020(6), pages 695-724.
    • Handle: RePEc:prg:jnlpol:v:2020:y:2020:i:6:id:1300:p:695-724
    DOI: 10.18267/j.polek.1300
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    References listed on IDEAS

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    More about this item

    Keywords

    fiscal rules; monetary union; BARS curve; optimal government size; government debt; government deficit;
    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
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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