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Efficiency of stability-oriented institutions: the European case

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  • Fabrice Capoen

    (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique)

  • Jérôme Creel

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

Abstract

Stability-oriented European institutions correspond to the general prescriptions of the ‘new macroeconomics consensus'. This contribution provides an assessment of the pros and cons of these institutions in terms of macro stabilisation and exchange-rate swings drawing on different scenarios. We argue that the institutions which have been associated with the Euro – limits on public deficits and a conservative central bank – have somewhat jeopardized the efficiency of this new exchange-rate regime. Adaptation of institutions is thus needed: either cooperation or coordination may enhance European welfare.

Suggested Citation

  • Fabrice Capoen & Jérôme Creel, 2007. "Efficiency of stability-oriented institutions: the European case," SciencePo Working papers Main hal-03461990, HAL.
    • Handle: RePEc:hal:spmain:hal-03461990
    Note: View the original document on HAL open archive server: https://hal-sciencespo.archives-ouvertes.fr/hal-03461990
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    Cited by:

    1. Edwin Le Héron, 2008. "Fiscal and Monetary Policies in a Keynesian Stock-flow Consistent Model," Post-Print halshs-00388042, HAL.

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    More about this item

    JEL classification:

    • 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
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General

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