The Stability Pact - Rationales, Problems, Alternatives

22 Pages Posted: 20 Oct 2006

See all articles by Assar Lindbeck

Assar Lindbeck

; CESifo (Center for Economic Studies and Ifo Institute); Research Institute of Industrial Economics (IFN)

Dirk Niepelt

University of Bern - Department of Economics

Abstract

We analyze economic rationales for, and possible alternatives to, the Stability and Growth Pact (SGP). We identify various cross-country spillover effects and domestic policy failures as potential rationales. The two sets of problems suggest different corrective measures, and different measures than those applied in the context of the SGP. We contrast the legalistic perspective adopted in the Pact with a more incentive-based approach and discuss how the "legalistic" perspective gives rise to enforcement problems in connection with the implementation of the SGP's sanctions.

Suggested Citation

Lindbeck, Assar and Niepelt, Dirk, The Stability Pact - Rationales, Problems, Alternatives. Kyklos, Vol. 59, No. 4, pp. 579-600, November 2006. Available at SSRN: https://ssrn.com/abstract=938842 or http://dx.doi.org/10.1111/j.1467-6435.2006.00350.x

Assar Lindbeck (Contact Author)

( email )

Stockholm, SE-10691
Sweden
+46 8 163 078 (Phone)
+46 8 162 946 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

HOME PAGE: http://www.ifn.se/assarl

Dirk Niepelt

University of Bern - Department of Economics ( email )

Schanzeneckstrasse 1
Bern, CH-3001
Switzerland

Register to save articles to
your library

Register

Paper statistics

Downloads
12
Abstract Views
382
PlumX Metrics