Fiscal Policy and Growth in the Context of European Integration

32 Pages Posted: 2 Feb 2006

See all articles by Paul R. Masson

Paul R. Masson

International Monetary Fund (IMF) - Research Department; The Brookings Institution

Date Written: July 2000

Abstract

The paper considers the issue of whether a supranational fiscal policy in Europe is needed, and, if so, what responsibilities it should undertake. The literature on endogenous growth and the principle of subsidiarity suggest that such a policy should be limited to externalities or economies of scale not captured at the national level. These may include spending on research and development and transportation or knowledge networks, and harmonization of social security designed to enhance labor mobility. EU-wide stabilization policy or enhanced EU redistribution does not seem justified, however.

Keywords: European Union, fiscal federalism, tax competition, social security

JEL Classification: F22, Hll, R50

Suggested Citation

Masson, Paul R., Fiscal Policy and Growth in the Context of European Integration (July 2000). IMF Working Paper No. 00/133, Available at SSRN: https://ssrn.com/abstract=879909

Paul R. Masson (Contact Author)

International Monetary Fund (IMF) - Research Department ( email )

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The Brookings Institution ( email )

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