The Limits to Partial Banking Unions: A Political Economy Approach
| Autor: | Dana Foarta |
|---|---|
| Rok vydání: | 2018 |
| Předmět: |
Economics and Econometrics
business.industry media_common.quotation_subject 05 social sciences Economic rent Distribution (economics) International economics Order (exchange) 0502 economics and business Economics Banking union 050207 economics Autarky Distortion (economics) business Welfare 050205 econometrics media_common Bailout |
| Zdroj: | American Economic Review. 108:1187-1213 |
| ISSN: | 0002-8282 |
| DOI: | 10.1257/aer.20141388 |
| Popis: | This paper studies the welfare effects of a “partial banking union” in which cross-country transfers for bailouts are set at the supranational level, but policymakers in member countries decide the distribution of funds. This allows the self-interested policymakers to extract rents in the bailout process. In equilibrium, such a banking union can actually lower the welfare of citizens in the country receiving transfers compared to the autarky case, as the receiving country must increase its share of the overall burden of the bailout, in order to compensate for the rent-seeking distortion. Supranational fiscal rules are ineffective at reversing this result. (JEL D72, E44, E61, G01, G21, G28) |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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