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Bringing macroeconomics back into the political economy of reform: The Lisbon Agenda and the 'fiscal philosophy' of EMU

Mabbett, Deborah and Schelkle, W. (2007) Bringing macroeconomics back into the political economy of reform: The Lisbon Agenda and the 'fiscal philosophy' of EMU. JCMS: Journal of Common Market Studies 45 (1), pp. 81-103. ISSN 0021-9886.

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Official URL: http://dx.doi.org/10.1111/j.1468-5965.2007.00704.x

Abstract

The Lisbon Strategy supports reform of member states’ tax-benefit systems while the ‘fiscal philosophy’ of the EU postulates that governments should allow only automatic stabilisers, built into tax-benefit systems, to smooth aggregate income. We ask whether these two pillars of EU economic governance are compatible. By exploring how structural reforms affect fiscal stabilisation, we complement a political economy literature that asks whether fiscal consolidation fosters or hinders structural reforms. We conclude, based on simulations in EUROMOD, that Lisbon-type reforms may worsen the stabilising capacity of tax-benefit systems.

Item Type: Article
Keyword(s) / Subject(s): European monetary union, EMU, macroeconomic policy, structural adjustment, automatic stabilisers, political economy
School or Research Centre: Birkbeck Schools and Research Centres > School of Social Sciences, History and Philosophy > Politics
Depositing User: Professor Deborah Mabbett
Date Deposited: 15 Nov 2005
Last Modified: 17 Apr 2013 12:32
URI: http://eprints.bbk.ac.uk/id/eprint/259

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