Fiscal Federalism in Monetary Unions

Hypothetical Fiscal Transfers within the Euro-zone

Johannes Kabderian Dreyer, Peter A. Schmid

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

Resumé

Net fiscal transfers are commonly seen as a possible means to ensure the wellfunctioning of a currency area. We show that U.S. net fiscal transfers, measured as the difference between gross federal revenues and federal expenditures per state, are enormous. Moreover, we run panel regressions that suggest their dependence on relative GDP and relative GDP growth during crisis periods, an evidence of net fiscal transfers from relatively rich to relatively poor states (redistributive effect) and to states with an underperforming economic
development (stabilization effect). The Euro-zone (EZ) lacks a system of fiscal
federalism which raises the question whether it should be established in the
medium- and long-run. If so, which should be the magnitude of net fiscal transfers? We calculate these transfers hypothetically for 1999-2010, using a
relative volume comparable to the one in the USA.
OriginalsprogEngelsk
TidsskriftInternational Review of Applied Economics
Vol/bind29
Udgave nummer4
Sider (fra-til)506-532
ISSN0269-2171
DOI
StatusUdgivet - 4 jul. 2015

Citer dette

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Fiscal Federalism in Monetary Unions : Hypothetical Fiscal Transfers within the Euro-zone. / Dreyer, Johannes Kabderian; A. Schmid, Peter.

I: International Review of Applied Economics, Bind 29, Nr. 4, 04.07.2015, s. 506-532.

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

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