http://repub.eur.nl/res/concept/jel-E61/ Recent publications classified by JEL Code E61 en http://repub.eur.nl/static-eur/img/logo.png http://repub.eur.nl http://repub.eur.nl/res/pub/835/ 2003-09-05T00:00:00Z This paper argues that uncertainty as to the sustainability of a country?s budgetary position will frustrate budgetary stabilisers to operate as a stabilisation device. Therefore, rather than irrelevant or harmful, the disciplinary incentive offered by the Stability Pact is even beneficial from a stabilisation point of view. This implies that the common trade-off between rules (of the Stability Pact to prevent the externalities from unsustainable budget balances) and flexibility (required to stabilise output) does not hold in this case. The empirical results presented in the paper indicate that a substantial, statistically significant and robust partial relation exists between government debt on the one hand and the degree of actual stabilisation on the other hand. In passing, this paper provides evidence that the degree of intertemporal budgetary stabilisation in EU countries is at least as large as the degree of interregional stabilisation built-in in the US federal budget. Leeftink, B. http://repub.eur.nl/res/pub/816/ 2003-09-03T00:00:00Z This paper develops a monetary-fiscal game which stresses the importance of international spillovers and introduces a double (monetary and fiscal) credibility problem. Models that neglect the inability of fiscal policymakers to commit will tend to underestimate the welfare cost of structural distortions. Due to international spillovers, stochastic shocks may be relatively costly in welfare terms, despite the contribution of policy surprises to finance such shocks. The second part of the paper studies the welfare consequences of the monetary union. It is shown that the welfare impact of EMU for Europe is ambiguous, but that EMU is welfare-improving for the US. Cavelaars, P.A.D. http://repub.eur.nl/res/pub/6934/ 2000-10-23T00:00:00Z This paper considers whether political business cycles exist in Eastern European accession countries. Section I introduces the overall objectives of the work. Section II provides a short introduction to the political business cycle literature. It also considers the role of exchange rates, capital mobility, and central bank independence in restricting or encouraging political business cycles. Section III lays out the accession process to date as well as the exchange rate regimes accession states have used. Section IV tests empirically whether there have been political business cycles during the time period 1990 to 1999 for the 10 Eastern European accession countries, with estimations based on a Mundell-Fleming model. It finds that countries with flexible exchange rates have looser monetary policies in election years than in non-election years in countries with dependent central banks. If a country has a fixed exchange rate regime, it manipulates its economy in election years through running larger budgets instead of through looser monetary policy. Section V concludes with some policy implications for the European Union's enlargement process and EMU. Hallerberg, M. Vinhas de Souza, L. http://repub.eur.nl/res/pub/12299/ 1998-01-01T00:00:00Z In this paper a signalling model is used to examine the role of party ideology in the conduct of economic policy. A distinguishing feature of the model is that policy makers have more knowledge about the efficacy of economy policy than voters. This asymmetry of information generates an incentive for the policy makers to adopt an ideological view of how the economy works. It is shown that party ideologies are most likely to arise in rigid economic and polarized political systems. Swank, O.H.