2026-06-07T16:09:22Zhttps://docta.ucm.es/rest/oai/request

oai:docta.ucm.es:20.500.14352/132262023-08-26T19:49:19Zcom_20.500.14352_14col_20.500.14352_15

Jalles, Joao Tovar Mulas Granados, Carlos Tavares, José Correa Caro, Carolina 2023-06-17T13:21:33Z 2023-06-17T13:21:33Z 2018-03 1350-4851 10.1080/13504851.2017.1327119 https://hdl.handle.net/20.500.14352/13226 https://doi.org/10.1080/13504851.2017.1327119 We examine how exchange rate regimes affect fiscal discipline by investigating European countries as they transitioned from flexible to fully fixed exchange rates under the Euro. We apply the synthetic control method to estimate, for each Eurozone country, its counterfactual budget stance under flexible rates. Our evidence strongly suggests that fixing exchange rates negatively impacted negatively fiscal discipline. However, effects were not homogeneous, as they were mediated by political factors. For example, countries where policymakers faced a longer political horizon and operated within a more cohesive political environment, managed to perform better in terms of fiscal discipline. eng restricted access Single currency and fiscal performance: the early Euro Area in perspective journal article