(Un)limited influence of Germany in Eurozone: Survival of common currency from the perspective of historical institutionalism

Dabic, Dragana

doi:10.2298/medjp1604327d

Cited by 1 publication

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“…Dabić, on the other hand, contends that EMU survived the crisis despite significant difficulties and pessimistic predictions without leading to a transition to an economic union with supranational fiscal power [45]. According to Stawska, the EMU's coordination of monetary and fiscal policies has been relatively effective in terms of maintaining price and monetary stability while promoting economic growth [46].…”

Section: Literature Reviewmentioning

confidence: 99%

Evaluating the Outcomes of Monetary and Fiscal Policies in the EU in Times of Crisis: A PLS-SEM Approach

et al. 2023

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The asymmetric level of integration within the European Union (EU) regarding membership in the European Monetary Union (EMU) has resulted in inconsistent responses to crises such as the Great Recession of 2007–2009 and the European sovereign debt crisis of 2010–2013. Furthermore, it has led to varying outcomes of monetary and fiscal policies implemented across EU countries. This paper aims to investigate the impact of monetary and fiscal policies on economic development and employment through the inflation channel in the EU between 2007 and 2015, using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results indicate that the outcomes of monetary policy have been mixed between EMU and non-EMU countries, resulting in different measures and negative spillover effects of the European Central Bank’s (ECB) policy on countries outside of the EMU. Meanwhile, the ability of fiscal policy to lower inflation and boost economic growth and employment has been limited, which means that the impact of fiscal policy on both economic development and employment and inflation has been minor. Based on the findings of this study, there should be better coordination of monetary and fiscal policies at the EU level to support the macroeconomic stability of the Union during times of crisis.

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Section: Literature Reviewmentioning

confidence: 99%