The Fiscal Framework in a Currency Union: Lessons from Comparison between the Euro Area and the Eastern Caribbean Currency Union

Andrew Hughes Hallett, Svend E. Hougaard Jensen

Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › peer review

Resumé

This paper draws out lessons from the euro area (EA) that are transferable to the Eastern Caribbean Currency Union (ECCU) and other Caribbean economies with fixed exchange rates. Based on observations from both the EA and the ECCU, we present a new policy framework which is capable of imposing fiscal discipline, with the aim of avoiding the risk of unsustainable fiscal policies reappearing and of preventing monetary policy from being undermined by undisciplined national governments. In the ECCU case, we find that fiscal deficits are more a result of financial and trade imbalances than fiscal indiscipline per se. Consequently, constraints on overall debt, public and private, rather than direct limits on endogenous public deficits, appear to be the appropriate response.
OriginalsprogEngelsk
TidsskriftThe World Economy
Vol/bind39
Udgave nummer6
Sider (fra-til)803-823
Antal sider21
ISSN0378-5920
DOI
StatusUdgivet - 2016

Citer dette

Hallett, Andrew Hughes ; Hougaard Jensen, Svend E. / The Fiscal Framework in a Currency Union : Lessons from Comparison between the Euro Area and the Eastern Caribbean Currency Union. I: The World Economy. 2016 ; Bind 39, Nr. 6. s. 803-823.
@article{07e36a3e7e55423bae2dc36e549272dc,
title = "The Fiscal Framework in a Currency Union: Lessons from Comparison between the Euro Area and the Eastern Caribbean Currency Union",
abstract = "This paper draws out lessons from the euro area (EA) that are transferable to the Eastern Caribbean Currency Union (ECCU) and other Caribbean economies with fixed exchange rates. Based on observations from both the EA and the ECCU, we present a new policy framework which is capable of imposing fiscal discipline, with the aim of avoiding the risk of unsustainable fiscal policies reappearing and of preventing monetary policy from being undermined by undisciplined national governments. In the ECCU case, we find that fiscal deficits are more a result of financial and trade imbalances than fiscal indiscipline per se. Consequently, constraints on overall debt, public and private, rather than direct limits on endogenous public deficits, appear to be the appropriate response.",
author = "Hallett, {Andrew Hughes} and {Hougaard Jensen}, {Svend E.}",
year = "2016",
doi = "10.1111/twec.12359",
language = "English",
volume = "39",
pages = "803--823",
journal = "The World Economy",
issn = "0378-5920",
publisher = "Blackwell Publishing",
number = "6",

}

Hallett, AH & Hougaard Jensen, SE 2016, 'The Fiscal Framework in a Currency Union: Lessons from Comparison between the Euro Area and the Eastern Caribbean Currency Union', The World Economy, bind 39, nr. 6, s. 803-823. https://doi.org/10.1111/twec.12359

The Fiscal Framework in a Currency Union : Lessons from Comparison between the Euro Area and the Eastern Caribbean Currency Union. / Hallett, Andrew Hughes; Hougaard Jensen, Svend E.

I: The World Economy, Bind 39, Nr. 6, 2016, s. 803-823.

Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › peer review

TY - JOUR

T1 - The Fiscal Framework in a Currency Union

T2 - Lessons from Comparison between the Euro Area and the Eastern Caribbean Currency Union

AU - Hallett, Andrew Hughes

AU - Hougaard Jensen, Svend E.

PY - 2016

Y1 - 2016

N2 - This paper draws out lessons from the euro area (EA) that are transferable to the Eastern Caribbean Currency Union (ECCU) and other Caribbean economies with fixed exchange rates. Based on observations from both the EA and the ECCU, we present a new policy framework which is capable of imposing fiscal discipline, with the aim of avoiding the risk of unsustainable fiscal policies reappearing and of preventing monetary policy from being undermined by undisciplined national governments. In the ECCU case, we find that fiscal deficits are more a result of financial and trade imbalances than fiscal indiscipline per se. Consequently, constraints on overall debt, public and private, rather than direct limits on endogenous public deficits, appear to be the appropriate response.

AB - This paper draws out lessons from the euro area (EA) that are transferable to the Eastern Caribbean Currency Union (ECCU) and other Caribbean economies with fixed exchange rates. Based on observations from both the EA and the ECCU, we present a new policy framework which is capable of imposing fiscal discipline, with the aim of avoiding the risk of unsustainable fiscal policies reappearing and of preventing monetary policy from being undermined by undisciplined national governments. In the ECCU case, we find that fiscal deficits are more a result of financial and trade imbalances than fiscal indiscipline per se. Consequently, constraints on overall debt, public and private, rather than direct limits on endogenous public deficits, appear to be the appropriate response.

UR - http://sfx-45cbs.hosted.exlibrisgroup.com/45cbs?url_ver=Z39.88-2004&url_ctx_fmt=info:ofi/fmt:kev:mtx:ctx&ctx_enc=info:ofi/enc:UTF-8&ctx_ver=Z39.88-2004&rfr_id=info:sid/sfxit.com:azlist&sfx.ignore_date_threshold=1&rft.object_id=954921393018&rft.object_portfolio_id=&svc.holdings=yes&svc.fulltext=yes

U2 - 10.1111/twec.12359

DO - 10.1111/twec.12359

M3 - Journal article

VL - 39

SP - 803

EP - 823

JO - The World Economy

JF - The World Economy

SN - 0378-5920

IS - 6

ER -

Hallett AH, Hougaard Jensen SE. The Fiscal Framework in a Currency Union: Lessons from Comparison between the Euro Area and the Eastern Caribbean Currency Union. The World Economy. 2016;39(6):803-823. https://doi.org/10.1111/twec.12359

Adgang til dokument