Macroeconomic Policy Coordination in EMU

Inhaltsverzeichnis (Table of Contents)

• Introduction
• Macroeconomic policy coordination under the Stability and Growth Pact before the crisis
  • Stability and Growth Pact content: numerical constraints
    • Economic rationale: the role of debts and deficits as the background of the Stability and Growth Pact content
    • Critical assessment: the need for country-specific constraints
  • Stability and Growth Pact objective: fiscal discipline
    • Economic rationale: negative externalities and the reasons of fiscal laxity
    • Critical assessment: the need for discretion and flexibility
  • Stability and Growth Pact governance: coordination through rules and mechanisms
    • Rule-based architecture and mechanism design
    • Economic rationale: The reasons for and the consequences of a rule-based framework.
    • Critical assessment: credibility issues with the Stability and Growth Pact
• Macroeconomic policy coordination during and after the crisis
  • The Stability and Growth Pact during the crisis
  • Reforms regarding macroeconomic policy coordination
  • Comparison of ante-crisis propositions and reforms
    • Dimensions and trade-offs of the Stability and Growth Pact design
    • Requested dimensional changes compared to actual developments of the SGP
• Conclusion

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This bachelor thesis aims to examine the main arguments for and against the Stability and Growth Pact (SGP) under the areas of content, objectives, and enforcement design. The thesis will highlight the resulting trade-offs and link these to developments introduced through reforms, as well as economic outcomes in different situations, namely the time period before and during and after the crisis.

• The need for macroeconomic policy coordination in a monetary union environment
• The role of the Stability and Growth Pact (SGP) in promoting fiscal discipline and ensuring economic stability in the EMU
• Trade-offs between fiscal discipline and national economic needs within the SGP framework
• Reforms of the SGP in response to the financial crisis and the European sovereign debt crisis
• Economic outcomes of the SGP before and after the crisis

Zusammenfassung der Kapitel (Chapter Summaries)

• Introduction: This chapter provides an overview of the need for macroeconomic policy coordination in the context of the EMU, highlighting the interdependence among member states and the potential for contagion effects. It introduces the Stability and Growth Pact (SGP) as a key framework for coordinating fiscal policies.
• Macroeconomic Policy Coordination under the Stability and Growth Pact before the Crisis: This chapter delves into the content, objectives, and governance of the SGP before the financial crisis. It examines the rationale behind the pact's numerical constraints on deficits and debts, as well as the criticisms and propositions regarding the need for country-specific constraints and discretion in fiscal policy.
• Macroeconomic Policy Coordination during and after the Crisis: This chapter analyzes the SGP's performance during and after the financial crisis. It discusses the impact of the crisis on the pact and the reforms implemented in response, focusing on the comparison between ante-crisis propositions and actual developments.

Schlüsselwörter (Keywords)

This bachelor thesis focuses on macroeconomic policy coordination, the Stability and Growth Pact (SGP), fiscal discipline, and economic stability in the context of the European Monetary Union (EMU). Key themes include the trade-offs between fiscal discipline and national economic needs, the impact of the financial crisis and the European sovereign debt crisis on the SGP, and the reforms implemented in response to these crises.