Financial Market Restrictions of Fiscal Policy in the Federal System of the EU

Financial Market Restrictions of Fiscal Policy in the Federal System of the EU

Fiscal policy within the EU increasingly experiences restrictions resulting from open financial markets. Besides global trends (e.g. growing interdependencies, the boom of derivative markets, the internet) political decisions in Europe such as the introduction of the Euro or the coming enlargement of the Community are changing the framework in which European government is situated. This project has contributed to a better understanding of financial market restrictions for fiscal policy in the EU under this changing environment. Even though it is empossible to summarise the differentiated results from different methods combined with different data bases in a few sentences the following statement emerges: If there are really binding restrictions associated with open financial markets they seem to be at work in relation to deficit policies. In contrast to that, the empirical evidence for an impact on the expenditure and revenue side of the budgets is rather weak.

Project members

Heinz König

Heinz König

Project Coordinator

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Selected Publications

Ursachen und Nachhaltigkeit sinkender Staatsdefizite in der EU

Heinemann, Friedrich (2001), Ursachen und Nachhaltigkeit sinkender Staatsdefizite in der EU, List Forum für Wirtschafts- und Finanzpolitik 27 (3) , 211-228

Strategic Lessons from the Maastricht Criteria

Heinemann, Friedrich (2000), Strategic Lessons from the Maastricht Criteria, Kredit und Kapital 33 (4) , 455-467

Globalisation, EMU and Fiscal Discipline: Evidence from OECD Countries

Heinemann, Friedrich (2000), Globalisation, EMU and Fiscal Discipline: Evidence from OECD Countries, Aussenwirtschaft 55 , 211-232

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