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UEM ou politique de l’autruche ? Les candidats à l’UE(M) face aux questions de politique budgétaire et monétaire

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  • Willem H. Buiter

Abstract

[eng] EMU or Ostrich ? Fiscal and Monetary Policy Issues Faced by E(M)U candidates . This paper deals with two sets of issues : the consequences of the SGP for fiscal-financial sustainability, and some risks associated with operational independence of the central bank (CB). Poor co-operation between the fiscal and monetary authorities can be costly in two contingencies : . - the central bank's role as the lender of last resort needs to be backed up by the willingness of the Treasury to . recapitalise the CB ; . - unwanted deflation needs to be prevented or combated, but the CB's conventional monetary arsenal is exhausted. A temporary tax cut or transfer payment increase financed through the issuance of base money will always stimulate demand provided it is not expected to be reversed, in present value terms, in the future. In most real-world institutional/legal swings, the implementation of a helicopter drop of base money requires co-ordinated actions by the CB and Treasury. CB independence is unlikely to survive if either or both of these contingencies occur, if there is an ineffective response by the fiscal and monetary authorities. . JEL classifications : E31, E61, E62, E63, F33, F41, F42, H62, H87, F32, E42 [fre] Ce papier aborde les conséquences du PSC sur la soutenabilité budgétaire et financière, et les risques liés à l'indépendance opérationnelle de la Banque centrale (BC). Une mauvaise coopération entre autorités budgétaire et monétaire peut s'avérer coûteuse dans deux cas : . - lorsque le rôle de prêteur en dernier ressort a besoin d'être soutenu par la volonté du ministère des Finances de recapitaliser la BC ; . - lorsqu'une déflation non souhaitée doit être prévenue ou combattue, mais l'arsenal monétaire conventionnel de la BC est épuisé. Une réduction d'impôt temporaire ou un accroissement des transferts, financés par l'émission de monnaie de base, stimuleront toujours la demande, pour autant qu'aucune inversion ne soit anticipée. Dans la plupart des systèmes institutionnels, une injection massive de base monétaire requiert une coordination entre les autorités monétaire et budgétaire. Il est peu probable que l'indépendance de la BC survive à l'apparition d'une de ces éventualités, si la réponse des autorités budgétaire et monétaire se révèle inefficace. . Classification JEL : E31, E61, E62, E63, F33, F41, F42, H62, H87, E32, E42

Suggested Citation

  • Willem H. Buiter, 2003. "UEM ou politique de l’autruche ? Les candidats à l’UE(M) face aux questions de politique budgétaire et monétaire," Revue d'Économie Financière, Programme National Persée, vol. 72(3), pages 83-106.
    • Handle: RePEc:prs:recofi:ecofi_0987-3368_2003_num_72_3_4871
    DOI: 10.3406/ecofi.2003.4871
    Note: DOI:10.3406/ecofi.2003.4871
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    References listed on IDEAS

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    1. Willem H. Buiter, 2003. "Ten Commandments for a Fiscal Rule in the E(M)U," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 19(1), pages 84-99.
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    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • 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
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • 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
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System

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