On deficits and symmetries in a fiscal capacity
- There is a growing debate about complementing the European Monetary Union by a more comprehensive fiscal union. Against this background, this paper emphasizes that there is a trade-off in designing a system of fiscal transfers ("fiscal capacity") in a union between members of different size. A system cannot guarantee symmetric treatment of members and simultaneously ensure a balanced budget. We compute hypothetical transfers for the Eurozone members from 2001 to 2012 to illustrate this trade-off. Interestingly, a symmetric system that treats shocks in small and large countries symmetrically would have produced large budgetary surpluses in 2009, the worst year of the financial crisis.
| Author: | Shafik Hebous, Alfons J. WeichenriederORCiDGND |
|---|---|
| URN: | urn:nbn:de:hebis:30:3-385870 |
| URL: | http://ssrn.com/abstract=2637776 |
| DOI: | https://doi.org/10.2139/ssrn.2637776 |
| Parent Title (German): | SAFE working paper series ; No. 112 |
| Series (Serial Number): | SAFE working paper (112) |
| Publisher: | SAFE |
| Place of publication: | Frankfurt am Main |
| Document Type: | Working Paper |
| Language: | English |
| Date of Publication (online): | 2015/07/30 |
| Date of first Publication: | 2015/07/30 |
| Publishing Institution: | Universitätsbibliothek Johann Christian Senckenberg |
| Release Date: | 2015/12/01 |
| Tag: | asymmetric shocks; federal transfers; fiscal union; optimum currency area |
| Issue: | July 2015 |
| Page Number: | 14 |
| First Page: | 1 |
| Last Page: | 14 |
| HeBIS-PPN: | 368512592 |
| Institutes: | Wirtschaftswissenschaften / Wirtschaftswissenschaften |
| Wissenschaftliche Zentren und koordinierte Programme / House of Finance (HoF) | |
| Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS) | |
| Wissenschaftliche Zentren und koordinierte Programme / Sustainable Architecture for Finance in Europe (SAFE) | |
| Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
| Sammlungen: | Universitätspublikationen |
| Licence (German): |  Deutsches Urheberrecht |
