The SGP?Faulty by Design or Made Faulty by Politicians? An Assessment Based on a Simulation Model

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216224%3A14560%2F14%3A00076601" target="_blank" >RIV/00216224:14560/14:00076601 - isvavai.cz</a>

Výsledek na webu

<a href="http://nho.econ.muni.cz/14-2014/3-2014/sgp-%E2%80%93-faulty-design-or-made-faulty-politicians-assessment-based-simulation-model" target="_blank" >http://nho.econ.muni.cz/14-2014/3-2014/sgp-%E2%80%93-faulty-design-or-made-faulty-politicians-assessment-based-simulation-model</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.2478/revecp-2014-0013" target="_blank" >10.2478/revecp-2014-0013</a>

Jazyk výsledku

angličtina

Název v původním jazyce

The SGP?Faulty by Design or Made Faulty by Politicians? An Assessment Based on a Simulation Model

Popis výsledku v původním jazyce

By joining the European Monetary Union (the ?EMU?), member countries lost the ability to use monetary policy as a tool for macroeconomic regulation. The attention was then focused on regulation of fiscal policy and Stability and Growth Pact (the ?SGP?) was the instrument agreed upon. The states of the EMU have agreed to meet the 3% of GDP requirement for the maximum annual public budget deficit. Based on evolution of public debt in member countries, we can say that the SGP has failed as a tool for fiscal discipline. In this paper, we answer the question of whether the failure was due to the incorrect concept of the SGP or whether the development of the debt was affected more by arbitrary disrespect of the agreed rules. The two reasons mentioned above are interdependent. To separate them, we construct a dynamic model of EU countries? public debt. By using real data, we simulate the potential values of public debt in a situation where the SGP rules have been respected in recent years.

Název v anglickém jazyce

The SGP?Faulty by Design or Made Faulty by Politicians? An Assessment Based on a Simulation Model

Popis výsledku anglicky

By joining the European Monetary Union (the ?EMU?), member countries lost the ability to use monetary policy as a tool for macroeconomic regulation. The attention was then focused on regulation of fiscal policy and Stability and Growth Pact (the ?SGP?) was the instrument agreed upon. The states of the EMU have agreed to meet the 3% of GDP requirement for the maximum annual public budget deficit. Based on evolution of public debt in member countries, we can say that the SGP has failed as a tool for fiscal discipline. In this paper, we answer the question of whether the failure was due to the incorrect concept of the SGP or whether the development of the debt was affected more by arbitrary disrespect of the agreed rules. The two reasons mentioned above are interdependent. To separate them, we construct a dynamic model of EU countries? public debt. By using real data, we simulate the potential values of public debt in a situation where the SGP rules have been respected in recent years.

Druh

J_x - Nezařazeno - Článek v odborném periodiku (Jimp, Jsc a Jost)

CEP obor

AH - Ekonomie

OECD FORD obor

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Projekt

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Návaznosti

S - Specificky vyzkum na vysokych skolach

Rok uplatnění

2014

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název periodika

Review of Economic Perspectives

ISSN

1213-2446

e-ISSN

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Svazek periodika

14

Číslo periodika v rámci svazku

3

Stát vydavatele periodika

CZ - Česká republika

Počet stran výsledku

17

Strana od-do

249-265

Kód UT WoS článku

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EID výsledku v databázi Scopus

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