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 |
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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 |