Fiscal Rules, Financial Stability and Optimal Currency Areas

Paul De Grauwe, Pasquale Foresti

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

In this paper we suggest that Eurozone countries face a policy trade-off between: (1) a common rule imposing co-movements in fiscal policy; (2) financial stability; and (3) financial integration. We provide empirical evidence documenting the existence of such a trade-off in the period ​characterized by the financial crisis and by the sovereign debt crisis.
Original languageEnglish
Pages (from-to)278-281
Number of pages4
JournalEconomics Letters
Volume145
Issue numberC
Early online date7 Jul 2016
DOIs
Publication statusPublished - Aug 2016
Externally publishedYes

Keywords

  • Fiscal policy rules
  • Eurozone
  • Financial stability
  • Policy objectives
  • Optimal Currency Areas

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