Do financial markets and the Maastricht Treaty discipline governments? New evidence

Authors: Haan J.D.; Sturm J-E.

Source: Applied Financial Economics, Volume 10, Number 2, 1 April 2000 , pp. 221-226(6)

Publisher: Routledge, part of the Taylor & Francis Group

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Abstract:

This note examines whether financial markets have a disciplining effect on governments' financial policies. It is concluded that increasing interest burdens indeed lead to lower primary deficits. There is only weak evidence that the fiscal policy rules of the Maastricht Treaty reduced budget deficits.

Language: English

Document Type: Research article

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