The political economy of fiscal policy in EMU

Hancké, Bob ORCID: 0000-0002-3334-231X (2003) The political economy of fiscal policy in EMU. European Political Economy Review, 1 (1). pp. 5-14. ISSN 1742-5697

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Abstract

This paper treats low inflation in EMU as a collective action problem for Ecofin. The SGP and more broadly the BEPG, operating against a background of the ECB and wage-setting, are the instruments for this. The ECB delegates sanctioning to the member-states while preserving the authority to set interest rates. Labour relations systems in different countries pursue disinflationary wage settlements. The BEPG (including the SGP) therefore have to be understood as a critical element in a signalling game between the ECB, Ecofin and the wagesetting systems.

Item Type:	Article
Official URL:	http://www.lse.ac.uk/collections/EPER/main.htm
Additional Information:	© 2003 European Political Economy Infrastructure Consortium
Divisions:	European Institute
Subjects:	H Social Sciences > HB Economic Theory
Date Deposited:	06 Oct 2008 15:28
Last Modified:	11 Dec 2024 22:38
URI:	http://eprints.lse.ac.uk/id/eprint/18005

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