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The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Auriol , Emmanuelle / Brunner, Johann / Fleck, Robert / Mendola, Mariapia / Requate, Till / Schirle, Tammy / de Vries, Frans / Zulehner, Christine

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1935-1682
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Volume 10, Issue 1 (Jul 2010)

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Structural Reforms and Budget Deficits in a Monetary Union: A Strategic Approach

Juan Cristóbal Campoy
  • 1Universidad de Murcia,
/ Juan C. Negrete
  • 2Universidad de Murcia,
Published Online: 2010-07-08 | DOI: https://doi.org/10.2202/1935-1682.2125

Abstract

This paper explores the interrelations between budget deficits and structural reforms in a monetary union. The analysis considers the international spillovers generated by both policies. We show that efforts to achieve fiscal policy coordination within the Eurozone reduce member countries' incentives to carry out much-needed structural reforms. As a consequence, this cooperation can turn out to be welfare-reducing if it is not extended to the implementation of structural reforms.

Keywords: structural reforms; budget deficits; externalities; coordination

About the article

Published Online: 2010-07-08


Citation Information: The B.E. Journal of Economic Analysis & Policy, ISSN (Online) 1935-1682, DOI: https://doi.org/10.2202/1935-1682.2125. Export Citation

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