Forecasting Budgetary Deficits

01-03-1999

Under the Stability and Growth Pact countries in the Euro area are required to balance their budgets over the economic cycle, with an upper deficit limit of 3%. Will this be possible? This study examines the sensitivity of different countries' revenues and expenditures to changes in economic conditions, including a worst-case 'bust' scenario.

Under the Stability and Growth Pact countries in the Euro area are required to balance their budgets over the economic cycle, with an upper deficit limit of 3%. Will this be possible? This study examines the sensitivity of different countries' revenues and expenditures to changes in economic conditions, including a worst-case 'bust' scenario.

Autore esterno

Gerbert Romijn and Holger van Eden, NEI B.V., Rotterdam