상세검색
최근 검색어 전체 삭제
다국어입력
즐겨찾기0
145139.jpg
SCOPUS 학술저널

Does the Maastricht Public Debt Criterion Call for Fiscal Expansion or Contraction?

Does the Maastricht Public Debt Criterion Call for Fiscal Expansion or Contraction?

The Maastricht convergence criteria of the Economic and Monetary Union of Europe stipulate that the public debt of a member country may be at most 60 per cent, and the fiscal deficit at most 3 per cent of the GNP, which has led member governments to contract their expenditures. A simple two-country flow equilibrium model demonstrates that if the central banks target the interest rate, the contraction is likely to increase the public debt ratio in many member countries. A contraction by one country unambiguously increases the debt ratio of the other. If the foreign central bank targets the money supply, the contraction is less likely to increase the ratio. The ratio can also be lowered with monetary policy, and the appropriate policy is expansion in both regimes. Simulation with an econometric model shows that, with interest rate targeting, fiscal contraction increases the debt ratios of 3 out of 14 EU countries if the country contracts alone. If all the member countries contract simultaneously with money supply targeting by Germany, the rations of 7 countries increase. These effects persist for four to eleven quarters, whereafter the ratios begin to decline in all the countries except Belgium.

Ⅰ.Introduction

Ⅱ.The Model

Ⅲ.Interest Rate Targeting by the Foreign Central Bank

Ⅳ.Money Supply Targeting by the Foreign Central Bank

Ⅴ.A Test

로딩중