Specificity of Fiscal Policy in the Monetary Union
Journal Title: Acta Economica - Year 2018, Vol 16, Issue 28
Abstract
The condition of the optimal currency area as a theoretical basis of the monetary integration considers the harmonization of the fiscal and monetary policy crucial in achieving the efficient functioning of the monetary union. The issue of sustainability of the monetary union without fiscal union reaches real intensity in times of crisis and market instability. In that context, this paper focuses on the relation of uncoordinated fiscal policies and non-fulfillment of the fiscal criteria of convergence with the functioning and sustainability of the monetary union. The aim of this research is to establish whether, based on the analysed theoretical assumptions and empirical case, the fiscal criteria are respected in practice in the member countries, and how specificity of the fiscal policy influences the monetary integration especially in the years of crisis. We started research with the cost-benefit analysis of the monetary union pointing out to the specific costs and benefits occurring when a country joins the monetary union. We examined the fiscal parameters of the convergence criteria of the member states pointing to the problem of heterogeneity of members and deviations from the reference values of the Union. The results show that the metodology used to establish the set norms of the fiscal convergence cannot correspond symetrically to all member countries. The results also point to the fact that, unlike symmetrical, in the emergence of asymmetric shocks, i.e. disorders that affect various countries differently, membership in the monetary union becomes more expensive because of the inability to conduct monetary policy.
Authors and Affiliations
Branka Topić-Pavković
Keywords
Related Articles
- EP ID EP43867
- DOI https://doi.org/10.7251/ACE1828097T
- Views 284
- Downloads 0
FINANCIAL EVALUATION OF INVESTMENT PROJECTS PROFITABILITY
Justifiability evaluation of an investment projects is a very complex process which request appreciation and consideration of all relevant factors, first of all determining of the effects obtained by implementation of ce...
Model selection of subsequent evaluation of fixed tangible assets in the function of company’s yield and fnancial position
The tangible fixed asset is a part of company’s property and its value in the financial statements of manufacturing enterprises participates considerably in total assets. Recognition and valuation of this balance sheet p...
MACROECONOMIC ASPECTS OF REGIONAL POLITICS OF THE EUROPEAN UNION
Regional politics is one of the key common politics of the European Union. Its objectives are the growth of economic-social cohesion and equalizing the levels of development. Such conception of development requires high...
Institutional efficiency as a function of export capability of small economies
Institutions and their efficiency are key factor towards strengthening of export capacities of small economies. Main responsibility for establishing these institutions and for their efficiency is up to the Government. Wi...
The Role of The Productive Coefficients in The Efficiency Measurement of The Rural Complex Input
Development policy that is applied by the development countries on the rural regions is in expansion. An outline of the development of the neglected, uninhabited and the far-away territories of the EU, USA and the other...