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Structural Reforms and Budget Deficits in a Monetary Union: A Strategic Approach

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  • Campoy Juan Cristóbal

    (Universidad de Murcia)

  • Negrete Juan C.

    (Universidad de Murcia)

Abstract

This paper explores the interrelations between budget deficits and structural reforms in a monetary union. The analysis considers the international spillovers generated by both policies. We show that efforts to achieve fiscal policy coordination within the Eurozone reduce member countries' incentives to carry out much-needed structural reforms. As a consequence, this cooperation can turn out to be welfare-reducing if it is not extended to the implementation of structural reforms.

Suggested Citation

  • Campoy Juan Cristóbal & Negrete Juan C., 2010. "Structural Reforms and Budget Deficits in a Monetary Union: A Strategic Approach," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-31, July.
    • Handle: RePEc:bpj:bejeap:v:10:y:2010:i:1:n:59
    DOI: 10.2202/1935-1682.2125
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    Cited by:

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    2. Margrethe Aanesen & Claire W. Armstrong, 2016. "The Political Game of European Fisheries Management," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(4), pages 745-763, April.

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    More about this item

    Keywords

    structural reforms; budget deficits; externalities; coordination;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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