Maastricht: New and Old Rules

19 Pages Posted: 26 Mar 2008 Last revised: 16 Sep 2010

See all articles by Franco Spinelli

Franco Spinelli

University of Brescia - Department of Economics

Carmine Trecroci

University of Brescia

Date Written: October 1, 2006

Abstract

Thanks to the Maastricht Treaty and similar arrangements, central banks nowadays enjoy considerable independence. This is generally believed to be the result of relatively recent debates, which led to the conclusion that sheltering monetary authorities from the pressures of fiscal policymakers is a prerequisite for monetary stability. However, in history this point has in fact been a recurrent tenet. We start with David Ricardo's arguments in favour of central bank independence and against monetisation of public deficits. After WWI the latter issue was at the heart of the 1920 International Financial Conference of the League of Nations, which fostered and guided the establishment of many new central banks, and shaped various policymaking arrangements of today's monetary authorities.

Keywords: monetary stability, Fiscal rules, Central bank independence

JEL Classification: B12, B22, E42, E58, E61

Suggested Citation

Spinelli, Franco and Trecroci, Carmine, Maastricht: New and Old Rules (October 1, 2006). Available at SSRN: https://ssrn.com/abstract=1111974 or http://dx.doi.org/10.2139/ssrn.1111974

Franco Spinelli

University of Brescia - Department of Economics ( email )

Via San Faustino 74B
Brescia, 25122
Italy

Carmine Trecroci (Contact Author)

University of Brescia ( email )

Via San Faustino 74B
Brescia, 25122
Italy

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