Four Essays and a Funeral: Budgetary Arithmetic Under the Maastricht Treaty

CEPR Discussion Paper Series No. 1755

Posted: 13 Mar 1997

See all articles by Andrew J. Hughes

Andrew J. Hughes

Cardiff Business School; Centre for Economic Policy Research (CEPR); Vanderbilt University - College of Arts and Science - Department of Economics

Peter McAdam

European Central Bank (ECB)

Date Written: December 1996

Abstract

This paper analyzes four popular themes in the debate about the transition to monetary union: 1) fiscal discipline creating gains in credibility; 2) there being perceptible risk of a bail out for the highly indebted countries; 3) budgets being successfully cut to the required 3% limit in conditions of low growth and low inflation; and 4) the convergence criteria actually being mutually consistent. The usual accounting identities show the first two effects are likely to be small or non-existent, whereas the second two are unlikely to be satisfied.

JEL Classification: F15, E63, H63

Suggested Citation

Hughes Hallett, Andrew J. and McAdam, Peter, Four Essays and a Funeral: Budgetary Arithmetic Under the Maastricht Treaty (December 1996). CEPR Discussion Paper Series No. 1755, Available at SSRN: https://ssrn.com/abstract=4735

Andrew J. Hughes Hallett (Contact Author)

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Vanderbilt University - College of Arts and Science - Department of Economics ( email )

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Peter McAdam

European Central Bank (ECB) ( email )

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