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Fiscal Cyclicality and EMU

Agustin S. Benetrix, IIIS, Trinity College Dublin
Philip R. Lane, IIIS, Trinity College Dublin and CEPR

IIIS Discussion Paper No. 403


For the set of EMU member countries, we examine cyclical patterns in scal out comes. We nd that there is signi cant time variation in scal cyclicality, with an improvement in the wake of the Maastricht Treaty but a deterioration after the creation of EMU. Furthermore, we show that the scal cycle is a ected by the nancial cycle in addition to the output cycle. The lessons for the current reforms of European economic and scal governance are manifest.



Last updated 28 August 2014 by IIIS (Email).