DEVOLUTION, INDEPENDENCE AND WALES’ FISCAL DEFICIT

POLITICAL DEVOLUTION WITHOUT FISCAL DEVOLUTION by

Using a conventional model, this paper examines the conditions under which it is possible to stabilise both the output (inflation) cycle and the budget deficit/surplus of a regional economy in a wider currency union. We find that it is never possible. But we can approximate that result (for example, by limiting budgetary instability when the cycle is smoothed) if the product and labour markets ...

Devolution and health: challenges for Scotland and Wales.

Devolution, independence, and the optimal provision of public goods

This paper examines whether two regions should remain together within a fiscal federation, or separate, when their inhabitants have different preferences for publicly provided goods. The paper focuses on trade-offs between returns to scale in the provision of the goods, and the scope to tailor provision to the tastes of the inhabitants in each region. A general model is developed that includes,...

Policy Games: Coordination and Independence in Monetary and Fiscal Policies

No ONE WOULD dream of designing the human anatomy by disconnecting the controls of the left and right sides of the body. Yet, for the most important economic controls in a modern economy, monetary and fiscal policies, economists today generally endorse the separation of powers as a way of optimizing noninflationary growth. What are the costs and benefits of coordination and independence in macr...

Working in Partnership: Devolution and the Development of a Distinctive Equalities Agenda in Employment, in Wales

Since devolution in 1998, the Welsh Assembly Government (WAG) has been proactive in exercising its responsibilities for equalities within its territories (Chaney, 2009; Davies, 2003). The Government of Wales Act 2006 moreover, placed a statutory duty on the Assembly to have due regard for equality of opportunity in everything it did. Although discrimination law in itself is not a function that ...