2024-03-29T05:35:23Zhttp://aei.pitt.edu/cgi/oai2
oai:aei.pitt.edu:607
2011-02-15T22:15:54Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303035:44303035303039
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D61727469636C65
"The Political Economy of Fiscal Policy in EMU"
Hancke, Bob
fiscal policy
European Central Bank
EMU/EMS/euro
This paper treats low inflation in EMU as a collective action problem for Ecofin. The SGP and more broadly the BEPG, operating against a background of the ECB and wage-setting, are the instruments for this. The ECB delegates sanctioning to the member-states while preserving the authority to set interest rates. Labour relations systems in different countries pursue disinflationary wage settlements. The BEPG (including the SGP) therefore have to be understood as a critical element in a signalling game between the ECB, Ecofin and the wagesetting systems.
European Political-economy Infrastructure Consortium (EPIC)
Schwarzer, Daniela
Tulmets, Elsa
2003-03
Article
PeerReviewed
application/pdf
http://aei.pitt.edu/607/1/hancke.pdf
Hancke, Bob (2003) "The Political Economy of Fiscal Policy in EMU". European Political Economy Review, 1 (1). 005-014.
http://aei.pitt.edu/607/
oai:aei.pitt.edu:627
2011-02-15T22:15:59Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D636F6E666572656E63655F6974656D
"Fiscal policy and growth in the context of European integration"
Masson, Paul
fiscal policy
The paper considers the issue of whether a supranational fiscal policy in Europe is needed, and, if so what responsibilities it should undertake. The literature on endogenous growth and the principle of subsidiarity suggest that such a policy should be limited to externalities or economies of scale not captured at the national level. These may include spending on research and development and transportation or knowledge networks, and harmonization of social security designed to enhance labor mobility. EU-wide stabilization policy or enhanced EU redistribution does not seem justified, however.
2000-05
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/627/1/WP7.pdf
Masson, Paul (2000) "Fiscal policy and growth in the context of European integration". In: UNSPECIFIED, Brussels, Belgium.
http://aei.pitt.edu/627/
oai:aei.pitt.edu:629
2011-02-15T22:16:00Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666167656E6572616C
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666165636F6E6F6D6963706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D636F6E666572656E63655F6974656D
"Growth in an open economy: some recent developments"
Turnovsky, Stephen J.
fiscal policy
economic policy
general
This paper discusses some of the recent developments in growth theory, doing so from the perspective of a small open economy. After setting out a basic generic model, we show how it may yield two of the key models that have played a prominent role in the recent literature, the endogenous growth model and the non-scale growth model. We focus initially on the former, emphasizing how the simplest such model leads to an equilibrium in which the economy is always on its balanced growth path. One aspect of the model is the importance of fiscal policy as a determinant of the equilibrium growth rate, an aspect that is discussed in detail. We also show how the endogeneity or otherwise of the labor supply is crucial in determining the equilibrium growth rate and its responsiveness to macroeconomic policy. But transitional dynamics are an important aspect of the growth process and indeed much research has been directed to determining the speed with which the economy converges to its balanced growth path. We discuss alternative ways that such transitional dynamics may be introduced. These include (i) restricted access to the world capital market; (ii) the introduction of government capital , and (iii) the two-sector production model, pioneered by Lucas. In the original analysis, the two capital goods relate to physical and human capital and in the international context these naturally can be identified with traded and nontraded capital, respectively. Criticism of the endogenous growth model has led to the development of the nonscale growth model. This too is characterized by transitional dynamics, which are more flexible than those of the corresponding endogenous growth model. This model is much closer to the neoclassical model; in particular, the long-run growth rate is independent of macroeconomic policy. However, since such models are typically associated with slow convergence speeds, policy can influence the accumulation of capital for extended periods of time, leading to significant long-run level effects. The discussion seeks to emphasize the adaptability of the models to a wide range of issues. A final extension addresses the impact of volatililty on growth. This has been extensively analyzed empirically and a stochastic extension of the endogenous growth model provides a convenient framework within which to interpret this research.
2000-05
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/629/1/WP5.pdf
Turnovsky, Stephen J. (2000) "Growth in an open economy: some recent developments". In: UNSPECIFIED, Brussels, Belgium.
http://aei.pitt.edu/629/
oai:aei.pitt.edu:631
2011-02-15T22:16:00Z
7374617475733D707562
7375626A656374733D44:44303031:627564676574706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D61727469636C65
"The Political and Economic Determinants of Budgetary Consolidation in Europe"
Mulas-Granados, Carlos
fiscal policy
budgets & financing
This paper explores the political and economic determinants of fiscal adjustment strategies in the European Union (EU) between 1970 and 2001. Results confirm the hypotheses that, besides economic conditions, fragmentation of decision-making, ideology of the party in government, and closeness to elections affect fiscal policy in general and adjustment strategies in particular. During the nineties, the ideology of the party in government has become the most powerful predictor of fiscal policies and strategies of adjustment. Evidence shows that in the new context, socialist governments prefer to use balanced budgets to finance supply-side policies of capital formation and to maintain public employment, and are reluctant to cut these expenditures even at the expense of public consumption and transfers.
European Political-economy Infrastructure Consortium (EPIC)
Schwarzer, Daniela
Tulmets, Elsa
2003-03
Article
PeerReviewed
text/html
http://aei.pitt.edu/631/1/granados.pdf
Mulas-Granados, Carlos (2003) "The Political and Economic Determinants of Budgetary Consolidation in Europe". European Political Economy Review, 1 (1). 015-039.
http://aei.pitt.edu/631/
oai:aei.pitt.edu:816
2011-02-15T22:16:23Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:44303031303138:656C6D656D706C6F796D656E74756E656D706C6F796D656E74
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153746162696C69747947726F77746850616374
74797065733D61727469636C65
Fiscal Policy in the Member States under EMU
Sciamarelli, Alessandro
Stability and Growth Pact
fiscal policy
employment/unemployment
EMU/EMS/euro
[From the Introduction]. The main purpose of this paper is to consider whether fiscal policy according to EMU’s constraints is sustainable particularly in the context of high unemployment and low growth. In this respect, this paper is mainly based on previous studies which developed possible scenarios in order to examine this sustainability. The paper also considers the implications of the sanctions stated in the Stability and Growth Pact on EMU Member States’ economies should they actually be applied. In this respect, a negative economic scenario characterised by asymmetric shocks is presented in order to try to establish whether the EMU provides measures which may help economic recovery by enhancing regional convergence. A comparison with US fiscal federalism is also made to compare the means used in the US to achieve stabilisation. Finally, the discussion is extended by considering whether fiscal policies in a Monetary Union should in principle incorporate stabilising functions, and whether a Monetary Union actually needs a centralised fiscal policy in order to pursue such stabilisation.
1998
Article
NonPeerReviewed
application/pdf
http://aei.pitt.edu/816/1/scop98_3_4.pdf
Sciamarelli, Alessandro (1998) Fiscal Policy in the Member States under EMU. EIPASCOPE, 1998 (3). pp. 1-6.
http://aei.pitt.edu/816/
oai:aei.pitt.edu:1830
2011-02-15T22:20:15Z
7374617475733D707562
7375626A656374733D46:46303037
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
Fiscal Policy Spillovers in the Euro Area: Where are they? CEPS Working Document No. 176, November 2001
Gros, Daniel
Hobza, Alexandr.
fiscal policy
Germany
EMU/EMS/euro
What impact would a fiscal expansion in Germany have on the rest of the euro area? It has been generally suggested that it could go in either of two opposite directions, depending on the relative strength of two effects: the direct trade linkage and the financial market repercussions. A review of the results from four major macroeconomic models shows that the cross-country spillover effects of fiscal policy are indeed of uncertain sign and magnitude. Different models give quite different results if used in standardised simulations in terms of the sign, magnitude and time profile of the impact of a fiscal expansion in one member country (e.g. Germany) on other euro area countries. Fewer results are available concerning the potential spillover effects of structural policies, but they are similar to the ones concerning a budgetary stimulus: the magnitude of the spillover is small and varies across countries and over time.
2001-11
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/1830/1/WD176.PDF
Gros, Daniel and Hobza, Alexandr. (2001) Fiscal Policy Spillovers in the Euro Area: Where are they? CEPS Working Document No. 176, November 2001. [Working Paper]
http://aei.pitt.edu/1830/
oai:aei.pitt.edu:1846
2020-02-28T14:39:55Z
7374617475733D707562
7375626A656374733D44:44303031:44303031303337
7375626A656374733D46:46303233
7375626A656374733D46:46303036
7375626A656374733D46:46303037
7375626A656374733D44:44303032:44303032303039
7375626A656374733D44:44303031:44303031303138:656C6D656D706C6F796D656E74756E656D706C6F796D656E74
7375626A656374733D46:46303236
7375626A656374733D45:45303036
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
7375626A656374733D46:46303135
74797065733D776F726B696E677061706572
Structural Estimates of Equilibrium Unemployment in Six OECD Economies. ENEPRI Working Paper No. 22, July 2003
Horst, Albert van der.
tax policy
EU-US
OECD
France
Germany
Netherlands
Spain
U.K.
fiscal policy
employment/unemployment
In Europe, neither unemployment rates nor institutions are uniform. In the EMU, countries have coordinated their monetary policy, and fiscal policy might follow. Does convergence in fiscal policy imply that unemployment rates will converge, too, or is diversified fiscal policy desirable? An answer to this question requires insight into the dependence on fiscal policy of the unemployment rate in equilibrium. This study estimates the equilibrium rate of unemployment and shows that it has been affected significantly by taxes and benefits. Uniform fiscal policy would not, however, harmonise the unemployment rates because the impact of policy varies widely across the OECD economies.
2003-07
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/1846/1/ENEPRI_WP22.pdf
Horst, Albert van der. (2003) Structural Estimates of Equilibrium Unemployment in Six OECD Economies. ENEPRI Working Paper No. 22, July 2003. [Working Paper]
http://aei.pitt.edu/1846/
oai:aei.pitt.edu:1847
2011-02-15T22:20:19Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
Fiscal Policy in the New Open Economy; Macroeconomics and Prospects for Fiscal Policy. ENEPRI Working Paper No. 21, June 2003
Coutinho, Leonor.
fiscal policy
This paper reviews the analysis of fiscal policy in the new open economy macroeconomics literature, in view of increasing interest in the question of transmission and coordination of policies across countries, stirred by developments in this literature and by the formation of the euro area. The analysis focuses on two main points: (i) the identification of welfare spillover effects to third countries; and (ii) the assessments made so far of the potential gains from pursuing non-cooperative and cooperative fiscal stabilisation policies. Regarding welfare spillovers, some additional results are derived to examine whether the exchange rate regime (flexible or fixed) matters for the size of these spillovers, and whether the type of policy pursued (balanced-budget or debt-financed) matters. Fixed exchange rates only seem to postpone the costs from the short to the long run, but the type of policy is crucial in determining the welfare impact of fiscal expansions. With respect to policy coordination, attention is drawn to the need to reflect on a potential role for fiscal policy as a stabilisation tool, and on possible interactions between fiscal and monetary policy.
2003-06
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/1847/1/ENEPRI_WP21.pdf
Coutinho, Leonor. (2003) Fiscal Policy in the New Open Economy; Macroeconomics and Prospects for Fiscal Policy. ENEPRI Working Paper No. 21, June 2003. [Working Paper]
http://aei.pitt.edu/1847/
oai:aei.pitt.edu:1867
2020-02-28T14:45:23Z
7374617475733D707562
7375626A656374733D45:45303036
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
Fiscal Decentralisation & Economic Growth in High-income OECD Countries. ENEPRI Working Paper No. 1, January 2001
Thiessen, Ulrich.
OECD
fiscal policy
Following a brief review of the benefits and shortcomings of fiscal decentralisation, the paper attempts to empirically analyse for high-income OECD countries the relationship between per capita economic growth, capital formation and total factor productivity growth, on the one hand, and indicators of fiscal decentralisation, on the other hand. The evidence appears to be consistent with the hypothesis that the benefits of fiscal decentralisation on economic growth and capital formation are limited. However, satisfactory indicators of fiscal decentralisation are yet not existing so that the results are subject to serious qualifications.
2001-01
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/1867/1/ENEPRI_WP01.pdf
Thiessen, Ulrich. (2001) Fiscal Decentralisation & Economic Growth in High-income OECD Countries. ENEPRI Working Paper No. 1, January 2001. [Working Paper]
http://aei.pitt.edu/1867/
oai:aei.pitt.edu:1964
2011-02-15T22:20:42Z
7374617475733D707562
7375626A656374733D46:46303035
7375626A656374733D46:46303037
7375626A656374733D44:44303031:44303031303335:737077656C666172657374617465
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D6F74686572
Welfare Intergenerational Distribution and Households: What does generational accounting tell us? ENEPRI Occasional Paper No. 2, October 2003
Vanne, Reijo
Santor, Nicola
Assarri, Carlo
Cozzolina, Maria
Declich, Carlo
Polin, Veronia
Roveda, Alberto
Seidel, Bernard.
fiscal policy
Finland
welfare state
Germany
Contains three separate chapters: Chapter 1. Generational Accounts, Fiscal Policy and Business Cycles in Finland, 1990-2000, by Reijo Vanne. Chapter 2. Intragenerational Distribution across Families: What do generational accounts tell us?, by Nicola Sartor, Carlo Azzarri, Maria Cozzolino, Carlo Declich, Veronica Polin and Alberto Roveda. Chapter 3. Family Burdens and the Transfer/Tax System in Germany, by Bernhard Seidel.
2003-10
Other
NonPeerReviewed
application/pdf
http://aei.pitt.edu/1964/1/ENEPRI_OP2.pdf
Vanne, Reijo and Santor, Nicola and Assarri, Carlo and Cozzolina, Maria and Declich, Carlo and Polin, Veronia and Roveda, Alberto and Seidel, Bernard. (2003) Welfare Intergenerational Distribution and Households: What does generational accounting tell us? ENEPRI Occasional Paper No. 2, October 2003. UNSPECIFIED.
http://aei.pitt.edu/1964/
oai:aei.pitt.edu:2100
2011-02-15T22:21:14Z
7374617475733D756E707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303035:44303035303039
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D636F6E666572656E63655F6974656D
"EMU: Balancing credibility and legitimacy in the policy mix"
Hodson, Dermot
Maher, Imelda.
monetary policy
fiscal policy
European Central Bank
EMU/EMS/euro
The paper first discusses monetary policy, outlining the debates and the balance between the independence and accountability of the ECB, before turning to fiscal policy where the main mechanisms and institutions involved in the formation and enforcement of policy are analysed. The loose institutional structures allowing for coordination of employment policy are then discussed. The article finally explores the tensions between credibility and legitimacy before concluding that adequate attention must be paid to the legitimacy of policy so as to ensure an effective policy mix with an appropriate balance as between credibility and legitimacy.
2001
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/2100/1/002114.PDF
Hodson, Dermot and Maher, Imelda. (2001) "EMU: Balancing credibility and legitimacy in the policy mix". In: UNSPECIFIED, Madison, Wisconsin. (Unpublished)
http://aei.pitt.edu/2100/
oai:aei.pitt.edu:2595
2011-02-15T22:23:08Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153746162696C69747947726F77746850616374
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D61727469636C65
Does the EU need the Stability and Growth Pact? EPIAScope 2004(2): 29-33
Xenaki, Athanassia.
fiscal policy
Stability and Growth Pact
The Stability and Growth Pact was adopted by the Amsterdam European Council in 1997, for the purpose of preventing Member States from incurring excessive budgetary deficits in the euro area. Its implementation during the past five years has revealed how difficult it is for the Member States to comply with its strict requirements. The Stability and Growth Pact has twice been at the centre of a European debate regarding its objectives and inflexibility. The purpose of this article is to examine the provisions of the Pact and consider whether there is need for further co-operation on fiscal policy and what such co-operation may entail.
2004
Article
NonPeerReviewed
application/pdf
http://aei.pitt.edu/2595/1/Scop04_2_5.pdf
Xenaki, Athanassia. (2004) Does the EU need the Stability and Growth Pact? EPIAScope 2004(2): 29-33. EPIAScope, 2004. p. 6.
http://aei.pitt.edu/2595/
oai:aei.pitt.edu:2900
2011-02-15T22:24:27Z
7374617475733D756E707562
7375626A656374733D44:44303031:44303031303138:656C6D656D706C6F796D656E74756E656D706C6F796D656E74
7375626A656374733D44:44303031:6575726F7065616E69736174696F6E6575726F7065616E697A6174696F6E6E6174696F6E616C6964656E74697479
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
7375626A656374733D44:44303031:6D656469616D65646961
74797065733D636F6E666572656E63655F6974656D
"Towards a Europeanization of socio-economic discourses? How the coordination of fiscal and employment policies is reflected in the quality press of large member states"
Meyer, Christoph O.
europeanisation/europeanization & European identity
media
fiscal policy
employment/unemployment
... The present paper attempts to provide some preliminary answers to these questions by focusing, firstly on the development of media attention devoted to these two governing modes, and, secondly, on how critical recommendations coming out of the peer review process are reflected in publicized debates. As empirical evidence we use the results of content analysis of quality broadsheets in three selected member states as well as standardized interviews that have been conducted with practitioners who are closely involved in the communication of these policies, either on the side of the media or on the side of governmental and institutional bodies. The present paper draws also on the two rounds of national reports drawn up by national experts from ten EU member states. Despite this rather broad empirical base, further research in both depth and breadth is necessary; and the midterm results should be regarded as preliminary.
2003
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/2900/1/139.pdf
Meyer, Christoph O. (2003) "Towards a Europeanization of socio-economic discourses? How the coordination of fiscal and employment policies is reflected in the quality press of large member states". In: UNSPECIFIED, Nashville, TN. (Unpublished)
http://aei.pitt.edu/2900/
oai:aei.pitt.edu:5950
2011-02-15T22:39:37Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D61727469636C65
Comment: The European System of Fiscal Statistics Needs Improvement
Xenaki, Nancy
fiscal policy
EMU/EMS/euro
[Introduction]. The Eurozone needs reliable statistics. It is important to know whether the policies implemented by Member State produce the intended effects. Since statistics may reveal policy failure, it is also important for the integrity of the system that statistical institutes are protected from political interference. In the recently recommended measures, regarding the independence, integrity and accountability of the national and Community statistical authorities, the Commission should have spelled out the meaning of independence in terms of the needed functional or institutional independence rather than refer to a vague "professional" independence.
2005
Article
NonPeerReviewed
application/pdf
http://aei.pitt.edu/5950/1/SCOPE2005%2D2_6.pdf
Xenaki, Nancy (2005) Comment: The European System of Fiscal Statistics Needs Improvement. EIPAScope, 2005 (2). pp. 45-46.
http://aei.pitt.edu/5950/
oai:aei.pitt.edu:6093
2011-02-15T22:40:31Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D61727469636C65
Europe’s Deficit Free Riders: A Panel Data Analysis
Warin, Thierry
Wolff, Lindsay.
fiscal policy
EMU/EMS/euro
The paper proposes an empirical method to measure the free riding possibility of public deficits in Europe. We use a cross-sectional time-series analysis of differences in national public deficits since 1991, and we compare the evolution of deficits before and after the inception of the euro in 1999. Evidence is that the countries breaching the Stability and Growth Pact are not likely free riders, but rather leaders in terms of deficits. In this case, they may lead the march towards higher public deficits in Europe.
European Political-economy Infrastructure Consortium (EPIC)
Schwarzer, Daniela
Tulmets, Elsa.
2005
Article
PeerReviewed
application/pdf
http://aei.pitt.edu/6093/1/warin%2Dwolff.pdf
Warin, Thierry and Wolff, Lindsay. (2005) Europe’s Deficit Free Riders: A Panel Data Analysis. European Political Economic Review, 3 (1). 05-17.
http://aei.pitt.edu/6093/
oai:aei.pitt.edu:6486
2011-02-15T22:42:46Z
7374617475733D756E707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303035:44303035303039
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D636F6E666572656E63655F6974656D
"Adjusting to EMU: The impact of monetary union on domestic fiscal and wage-setting institutions"
Enderlein, Henrik.
monetary policy
fiscal policy
European Central Bank
EMU/EMS/euro
This paper argues that when EU member states joined EMU, this resulted in domestic institutional changes in the areas of fiscal policy-making and wage-setting. The paper argues that these changes were triggered by two facts: (i) in EMU, the monetary policy can no longer be used as an instrument for output stabilization; (ii) the "one size fits all" monetary policy of the ECB potentially destabilizes output in those countries whose economic data diverge from the euro area average. Assuming that EMU member states will seek to use fiscal policy or wage-setting in order to re-stabilize output, the theoretical part of the paper investigates the economic and political contexts in which these two instruments can be used as stabilizing instruments and specifies the institutional pre-conditions for successful stabilization. The paper then extrapolates potential problem-pressures resulting from the ECB monetary policy for each country and investigates whether the appropriate set of institutions to deal with this pressure had existed before EMU or whether institutional change could be expected as a reaction to it. In a comparative part, institutional changes that have taken place in ten member states since the start of EMU are assessed and compared to the theoretical expectations. The paper concludes that the asymmetric pattern of institutional adjustment in fiscal policy institutions and wage-setting institutions closely follows the approach presented in the theoretical part of the paper.
2003
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/6486/1/000428_1.PDF
Enderlein, Henrik. (2003) "Adjusting to EMU: The impact of monetary union on domestic fiscal and wage-setting institutions". In: UNSPECIFIED, Nashville, TN. (Unpublished)
http://aei.pitt.edu/6486/
oai:aei.pitt.edu:6717
2011-02-15T22:44:06Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
7375626A656374733D46:46303131
74797065733D776F726B696E677061706572
Fiscal Policy: When Theory Collides with Reality. CEPS Working Documents No. 246, 16 June 2006
Tanzi, Vito.
Italy
fiscal policy
During the 1950s, Jan Tinbergen and other prominent economists developed an attractive theoretical way of using fiscal instruments (taxes and public spending) to promote socially-desirable economic objectives, such as stabilisation, income redistribution and more efficient allocation of resources. The theory may well have reflected the institutional arrangements that prevailed at the time in the countries of origin of these economists. For these countries, it could be seen as a perhaps naive but still ‘positive theory’. Of course, the arrangements or institutions prevailing in these countries could be significantly different from those in other countries. This would make the theory less realistic for other countries and less useful in predicting policy outcomes. This paper outlines the basic assumptions implicit in the theory and assesses how applicable they are to what is happening in practice. The paper takes the example of Italy in particular and finds major differences between the theory and the observed reality. In Italy there was no specific policy centre within the government where relevant questions of policy were analysed in detail. There was also much less effective control by the executive over the fiscal instruments than assumed by the theory. Deficiencies in essential information, such as the precise fiscal situation at a specific time, also made the pursuit of fiscal goals more difficult. Two core questions are asked. First, whether the European Commission should expand its role to include the promotion of institutions that economists have argued would improve the pursuit of fiscal policy in member countries. Second, whether the deficit concept now used in the evaluation of the outcome of fiscal policy should not be assessed to make it easier to calculate and less controversial.
2006-06
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/6717/1/1343_246.pdf
Tanzi, Vito. (2006) Fiscal Policy: When Theory Collides with Reality. CEPS Working Documents No. 246, 16 June 2006. [Working Paper]
http://aei.pitt.edu/6717/
oai:aei.pitt.edu:7137
2011-02-15T22:46:33Z
7374617475733D756E707562
7375626A656374733D46:46303037
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:44303031303138:656C6D696E647573747269616C6C61626F757272656C6174696F6E73
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666165636F6E6F6D6963706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
7375626A656374733D44:44303031:44303031303234
74797065733D636F6E666572656E63655F6974656D
"The Effect of European Integration on National Industrial Relations Systems: The Ambiguous Case of Germany"
Sadowski, Dieter.
monetary policy
fiscal policy
industrial policy
economic policy
Germany
industrial/labour relations
EMU/EMS/euro
[From the Introduction]. What impact has the supranational European regulation and the politically induced and controlled integration of product, capital and labour markets exercised on the German industrial relations systems to date? While the effects of EC social and labour law and the jurisdiction of the European Court of Justice can easily be identified - leaving open the question of whether reality complies with the norms - the consequences of EC polity and policy changes are much harder to trace....Many of the questions raised will only receive a tentative, speculative answer. To inform the discussion I will successively address: firstly, the explicit supranational regulations of labour market institutions; secondly, the indirect intervention into labour markets via monetary and fiscal policies and via industrial policies. Finally, the consequences of German unification and German monetary union are given special attention to separate German from European developments and to allow cautious speculations about the consequences of a European Monetary Union as stipulated in the Maastricht Treaty.
1993
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/7137/1/002371_1.PDF
Sadowski, Dieter. (1993) "The Effect of European Integration on National Industrial Relations Systems: The Ambiguous Case of Germany". In: UNSPECIFIED, Washington, CD. (Unpublished)
http://aei.pitt.edu/7137/
oai:aei.pitt.edu:7221
2011-02-15T22:47:00Z
7374617475733D756E707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D46:46303236
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D636F6E666572656E63655F6974656D
"The Fiscal Policy Implications of European Economic and Monetary Union and its Implications for Great Britain"
Hyde, Andrew G.
U.K.
fiscal policy
EMU/EMS/euro
[From the Introduction]. With only two more years to run on the European Community's (EC) 1992 single market program, European leaders have been seeking for the last several years to develop and specify a range of extensive proposals to enhance the benefits of an integrated market. One principal direction in which the Community has embarked has been to set the course for economic, monetary and political union. While political union probably will have the most visible impact on the face of Europe as we know it, any real progress seems light years away. No one in Europe is prepared to make the hard decisions required until some concrete evidence of the success of the single market is apparent. For the moment the most visible movement toward any substantial kind of union is in the realm of economic and monetary affairs (EMU). Originally intended for furthering the benefits already obvious from a decade's experience with closer currency cooperation by locking in the cross rates between member countries, EMU, even in the draft stage, is taking on a much larger significance for the economies of each member state.
1991
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/7221/1/002469_1.PDF
Hyde, Andrew G. (1991) "The Fiscal Policy Implications of European Economic and Monetary Union and its Implications for Great Britain". In: UNSPECIFIED, Fairfax, Virginia. (Unpublished)
http://aei.pitt.edu/7221/
oai:aei.pitt.edu:7289
2011-02-15T22:47:23Z
7374617475733D756E707562
7375626A656374733D44:44303033:4430303349474331393931
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303035:44303035303039
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D636F6E666572656E63655F6974656D
"The Shaping of the Framework for a Single Currency in the Course of the EMU Negotiations"
Thiel, Elke.
IGC 1991
fiscal policy
European Central Bank
EMU/EMS/euro
[From the introduction]. Based on a comprehensive study on the EMU negotiations in the course of the intergovernmental conference and its preparatory work (1), this paper will analyse the creation of the EMU framework with respect to its main ingredients, namely, (1) the European System of Central Banks, (2) the formulation of rules for a fiscal policy and (3) the procedures for implementing the EMU. This issue-related analysis will be combined with an analysis of the process itself, involving (1) the initial phase from 1987, when the idea was launched, up to the conclusion of the European summit in Strasbourg in December 1989 to convene the intergovernmental conference, (2) the conference preparations in 1990, and (3) the final negotiations of the intergovernmental conference itself.
1995
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/7289/1/002930_1.pdf
Thiel, Elke. (1995) "The Shaping of the Framework for a Single Currency in the Course of the EMU Negotiations". In: UNSPECIFIED, Charleston, South Carolina. (Unpublished)
http://aei.pitt.edu/7289/
oai:aei.pitt.edu:7925
2011-02-15T22:51:02Z
7374617475733D756E707562
7375626A656374733D44:44303032:44303032696E7465726E6174696F6E616C65636F6E6F6D79
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666165636F6E6F6D6963706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D636F6E666572656E63655F6974656D
European Fiscal Policy Coordination and the Persistent Myth of Stabilization
Jones, Erik.
international economy
fiscal policy
economic policy
[From the introduction]. Institutional and ideological influences are not as important as they might seem at first glance. Seen from Bologna, there are good reasons to doubt the mainstream critique of European macroeconomic governance. Probably the most important is the bias in the conventional wisdom against diversity, asymmetry, inequality, and difference. A close second is the weak scrutiny of realistic alternatives. It may be possible to make macroeconomic governance better it Europe, but the reverse is also true. We should be sure that what we have is broken before we try to fix it. The purpose of this paper is to present an alternative view. It is not a comprehensive argument. Rather it is a piecemeal attack on three of the building blocks in the conventional wisdom. Specifically, I am interested to examine the relationship between stabilization and adjustment; the prospects for fiscal stabilization; and the idea of international fiscal stabilization–by which I mean the timely transfer of fiscal resources to offset asymmetric economic performance across national economies within a common currency area like the euro-zone. My contention is that if we took a different view on these issues, we would find it hard to sustain the conventional wisdom and easy to see how suggestions for closer macroeconomic and fiscal policy coordination are likely to make matters worse.
2007
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/7925/1/jones%2De%2D09b.pdf
Jones, Erik. (2007) European Fiscal Policy Coordination and the Persistent Myth of Stabilization. In: UNSPECIFIED, Montreal, Canada. (Unpublished)
http://aei.pitt.edu/7925/
oai:aei.pitt.edu:7993
2011-02-15T22:51:26Z
7374617475733D756E707562
7375626A656374733D44:44303031:627564676574706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153746162696C69747947726F77746850616374
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D636F6E666572656E63655F6974656D
Strategic Signals and Multilateral Fiscal Surveillance
Steclebout-Orseau, Eloise,
Hallerberg, Mark.
fiscal policy
budgets & financing
Stability and Growth Pact
We present a game that first models the relationship among a population, a government and a watchdog. The focus is on the incentives that the government faces when making fiscal policy decisions. The population has incomplete information about the type of government that is in office, but an independent watchdog can reveal whether it is competent or affected by a deficit bias. In the second part of the paper, we elaborate on the strategic changes in fiscal policy-making induced by the introduction of fiscal surveillance at the European level. Based on recent developments, we discuss whether multilateral surveillance is effective as a safeguard against fiscal indiscipline. We find that, if the watchdog acts strategically and internalizes the impact of its signals on the intergovernmental game, it will only provide information on the economic and budgetary state of Member States in specific cases – namely when the cost of sanctions is sufficiently high compared to electoral stakes and provided that few countries are mentioned.
2007
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/7993/1/orseau%2De%2D08a.pdf
Steclebout-Orseau, Eloise, and Hallerberg, Mark. (2007) Strategic Signals and Multilateral Fiscal Surveillance. In: UNSPECIFIED, Montreal, Canada. (Unpublished)
http://aei.pitt.edu/7993/
oai:aei.pitt.edu:8019
2011-02-15T22:51:36Z
7374617475733D756E707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D636F6E666572656E63655F6974656D
Multi-level governance in fiscal consolidation and stabilisation
Schelkle, Waltraud,
Mabbett, Deborah.
fiscal policy
EMU/EMS/euro
Economists discuss multi-level governance in terms of fiscal federalism, namely as a problem of assigning fiscal functions optimally to different tiers of government. This literature assumes that the jurisdiction of the monetary authority coincides with that of the central fiscal authority. However, EMU implied for each member state that national fiscal policy became devolved relative to supranational monetary policy. In several member states, this ‘upward’ devolution of stabilisation came on top of fiscal decentralisation in the conventional sense. In the run-up to EMU, and even earlier, governments tended to decentralise public finances. The question this paper asks is how this dual trend of devolution relates to the goals of the EMU fiscal framework and its operation in practice. In this paper, we argue that laboratory fiscal federalism is a more appropriate framework than functional public finance or constitutional public choice for understanding fiscal devolution in EMU. We explore to what extent national governments have used innovations in upward and downward devolution to get better control over their budgets, using EMU as a lever. We also ask what this potential gain in budgetary control and consolidation has meant for national stabilisation in EMU.
2007
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/8019/1/schelkle%2Dw%2D08a.pdf
Schelkle, Waltraud, and Mabbett, Deborah. (2007) Multi-level governance in fiscal consolidation and stabilisation. In: UNSPECIFIED, Montreal, Canada. (Unpublished)
http://aei.pitt.edu/8019/
oai:aei.pitt.edu:8405
2011-02-15T22:53:49Z
7374617475733D707562
7375626A656374733D44:44303031:627564676574706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
Tying Hands Is Not Commitment: Can Fiscal Rules and Institutions Really Enhance Fiscal Discipline? Bruegel Working Papers, 2007/01, January 2007
Debrun, Xavier.
fiscal policy
budgets & financing
Visiting Bruegel Scholar Xavier Debrun discusses the role of fiscal institutions, including budget rules and non-partisan agencies, in enhancing fiscal discipline.
2007-01
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/8405/1/WP200701XD.pdf
Debrun, Xavier. (2007) Tying Hands Is Not Commitment: Can Fiscal Rules and Institutions Really Enhance Fiscal Discipline? Bruegel Working Papers, 2007/01, January 2007. [Working Paper]
http://aei.pitt.edu/8405/
oai:aei.pitt.edu:8408
2011-02-15T22:53:50Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
Fiscal Policy in EMU: Towards a Sustainability and Growth Pact? Bruegel Working Papers, 2005/01, December 2005
Coeure, Benoit
Pisani-Ferry, Jean.
fiscal policy
EMU/EMS/euro
The goal of the paper is to take stock of the discussions on the fiscal institutions of EMU, to confront the framework in place to what is known of the desirable properties of fiscal policy in a monetary union, and to discuss possible improvements.
2005-12
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/8408/1/Fiscal_Policy.pdf
Coeure, Benoit and Pisani-Ferry, Jean. (2005) Fiscal Policy in EMU: Towards a Sustainability and Growth Pact? Bruegel Working Papers, 2005/01, December 2005. [Working Paper]
http://aei.pitt.edu/8408/
oai:aei.pitt.edu:9033
2011-02-15T22:58:28Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153746162696C69747947726F77746850616374
7375626A656374733D44:44303031:643030314C6973626F6E6167656E6461
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
Fiscal Perspectives in Europe: Convergence and Debt’s Burden. CES Working Paper, no. 124, 2005
Warin, Thierry.
fiscal policy
Stability and Growth Pact
EMU/EMS/euro
Lisbon StrategyAgenda/Partnership for Growth and Employment
The paper addresses the question of the fiscal perspectives within the Economic and Monetary Union (EMU). By using a panel data analysis associated with an interpretation in terms of differences instead of levels, the results show a steady convergence of public deficits across the EMU, and that the EMU needs either to comply with the Lisbon agenda, or some kind of a growth strategy, or reduce the interest of the debt in order to regain some fiscal flexibility while abiding by the Stability and Growth Pact (SGP).
2005
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/9033/1/Warin.pdf
Warin, Thierry. (2005) Fiscal Perspectives in Europe: Convergence and Debt’s Burden. CES Working Paper, no. 124, 2005. [Working Paper]
http://aei.pitt.edu/9033/
oai:aei.pitt.edu:9122
2018-02-12T21:06:55Z
7374617475733D707562
7375626A656374733D46:46303036
7375626A656374733D44:44303031:4430303170707061
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666165636F6E6F6D6963706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
Politique economique: avon-nous appris? = Economic policy: what have we learned? Bruegel Third-Party Papers, May 2008
Pisani-Ferry, Jean.
public policy/public administration
monetary policy
fiscal policy
economic policy
France
This paper examines what economic policy has learned from the contemporary developments in economic research and which lessons have been drawn from them for the formulation and the implementation of French economic policy. Advances in research are grouped under three headings: the intertemporal character of private behaviour and public policies; imperfect information and its implications for policy; and political economy constraints. Next, the paper reviews three main innovations through which economic policy has adapted to this change in perspective: the independent institution; the flexible rule; and the incentive contract. The implementation of those innovations in France is compared to international experience in the fields of monetary policy, fiscal policy and public management. Finally, the paper discusses what France has been slow to adopt and implement those innovations.
2008-05
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/9122/1/JPF%2Drevue%2Deconomique%2Dmay%2D08.pdf
Pisani-Ferry, Jean. (2008) Politique economique: avon-nous appris? = Economic policy: what have we learned? Bruegel Third-Party Papers, May 2008. [Policy Paper]
http://aei.pitt.edu/9122/
oai:aei.pitt.edu:9483
2012-04-06T17:25:43Z
7374617475733D707562
7375626A656374733D44:44303031:44303031303337
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D6F74686572
Demographic Uncertainty and Fiscal Policy. ENEPRI Research Reports No. 20, 21 August 2006
Armstrong, Alex
Draper, Nick
Nibbelink, Andre
Westerhout, Ed.
tax policy
fiscal policy
It is well known by now that population ageing threatens the sustainability of fiscal policies in many countries. Although a number of policy options are available to address the problem, the uncertainty surrounding the future development of the population complicates matters. This paper analyses the economic, intergenerational and welfare effects of several alternative taxation policies that can be used to close the fiscal sustainability gap: immediate tax smoothing, delayed tax smoothing and balanced budget policies. A distinction is made between a consumption tax and a labour income tax. In addition, the influence of demographic uncertainty on the results of these policies is analysed from a number of perspectives. Simulated population shocks show the effect of demographic volatility on macroeconomic and fiscal variables. Stochastic simulations are presented to produce probabilistic bounds for the future development of the economic outcomes and to analyse the issue of optimal fiscal policy under uncertainty.
2006-08
Other
NonPeerReviewed
application/pdf
http://aei.pitt.edu/9483/2/9483.pdf
Armstrong, Alex and Draper, Nick and Nibbelink, Andre and Westerhout, Ed. (2006) Demographic Uncertainty and Fiscal Policy. ENEPRI Research Reports No. 20, 21 August 2006. UNSPECIFIED.
http://aei.pitt.edu/9483/
oai:aei.pitt.edu:9570
2011-02-15T23:01:49Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153746162696C69747947726F77746850616374
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D6F74686572
Understanding the Rationale of the Stability and Growth Pact. ACES Cases No. 2007.2
Palazuelos-Martinez, Manuel.
fiscal policy
Stability and Growth Pact
This paper investigates the rationales for fiscal rules in a monetary union, such as the Stability and Growth Pact (SGP), which has been adopted in the European Union (EU). Rationales for rules in fiscal policy have been found linked to the existence of externalities in a monetary union, which affect the common monetary policy and thus other countries in the currency union, as well as to the problems emerging from the political nature of the framework in which fiscal policy needs to be decided. Together, these comprise solid reasons for the creation of a fiscal rule in a monetary union. The main inconvenience of creating such a rule is, however, the loss of an independent fiscal policy for any individual economy within a currency union. Even taking this drawback into account, a crucial argument for the creation of the SGP regards the benefits and effectiveness of automatic stabilization and currency strength. On this point, a consensus has been reached, but scholars have not yet achieved wide agreement on the Pact’s effectiveness when economies face different types of shocks.
2007
Other
NonPeerReviewed
application/pdf
http://aei.pitt.edu/9570/1/2007.2ACES_Cases_Palazuelos.pdf
Palazuelos-Martinez, Manuel. (2007) Understanding the Rationale of the Stability and Growth Pact. ACES Cases No. 2007.2. UNSPECIFIED.
http://aei.pitt.edu/9570/
oai:aei.pitt.edu:10966
2011-02-15T23:11:44Z
7374617475733D707562
7375626A656374733D44:44303032:44303032303039
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
What lessons from the 1930s? CEPS Working Document No. 312, 7 May 2009
Gros, Daniel
Alcidi, Cinzia.
EU-US
monetary policy
fiscal policy
financial crisis 2008-on/reforms/economic governance
This paper explores three areas in which the experience of the Great Depression might be relevant today: monetary policy, fiscal policy and the systemic stability of the banking system. We confirm the consensus on monetary policy: deflation must be avoided. With regard to fiscal policy, the picture is less clear. We cannot confirm a widespread opinion according to which fiscal policy did not work because it was not tried. We find that fiscal policy went to the limit of what was possible within the confines of sustainability, as they existed then. Our investigation of the US banking system shows a surprising resilience of the sector: commercial banking operations (deposit-taking and lending) remained profitable even during the worst years. This suggests one policy conclusion: At present the authorities in both the US and Europe have little choice but to make up for the losses on ‘legacy’ assets and wait for banks to earn back their capital. But to prevent future crises of this type, one should make sure that losses from the investment banking arms cannot impair commercial banking operations. At least a partial separation of commercial and investment banking thus seems justified by the greater stability of commercial banking operations.
2009-05
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/10966/1/1839[1].pdf
Gros, Daniel and Alcidi, Cinzia. (2009) What lessons from the 1930s? CEPS Working Document No. 312, 7 May 2009. [Working Paper]
http://aei.pitt.edu/10966/
oai:aei.pitt.edu:10985
2011-02-15T23:11:53Z
7374617475733D707562
7375626A656374733D44:44303031:627564676574706F6C696379
7375626A656374733D44:44303031:44303031303335:737077656C666172657374617465
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
Fiscal sustainability and policy implications for the euro area. NBB Working Papers. No. 155, 21 January 2009
Balassone, Fabrizio
Cunha, Jorge
Langenus, Geert
Manzke, Bernhard
Pavot, Jeanne
Prammer, Doris
Tommasino, Pietro.
fiscal policy
welfare state
budgets & financing
In this paper we examine the sustainability of euro area public finances against the backdrop of population ageing. We critically assess the widely used projections of the Working Group on Ageing Populations (AWG) of the EU's Economic Policy Committee and argue that ageing costs may be higher than projected in the AWG reference scenario. Taking into account adjusted headline estimates for ageing costs, largely based upon the sensitivity analysis carried out by the AWG, we consider alternative indicators to quantify sustainability gaps for euro area countries. With respect to the policy implications, we assess the appropriateness of different budgetary strategies to restore fiscal sustainability taking into account intergenerational equity. Our stylised analysis based upon the lifetime contribution to the government's primary balance of different generations suggests that an important degree of pre-funding of the ageing costs is necessary to avoid shifting the burden of adjustment in a disproportionate way to future generations. For many euro area countries this implies that the medium-term targets defined in the context of the revised stability and growth pact would ideally need to be revised upwards to significant surpluses.
2009-01
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/10985/1/wp155En.pdf
Balassone, Fabrizio and Cunha, Jorge and Langenus, Geert and Manzke, Bernhard and Pavot, Jeanne and Prammer, Doris and Tommasino, Pietro. (2009) Fiscal sustainability and policy implications for the euro area. NBB Working Papers. No. 155, 21 January 2009. [Working Paper]
http://aei.pitt.edu/10985/
oai:aei.pitt.edu:11277
2011-02-15T23:13:41Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
Government debt is both unsustainable and desirable. CEPS Commentary, 24 June 2009
de Grauwe, Paul.
fiscal policy
There is no doubt that government deficits are unsustainable, but that does not imply that they are undesirable today. The uncomfortable truth is that in order for private debt levels to become sustainable again, government debt must temporarily become unsustainable.
2009-06
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11277/1/1864.pdf
de Grauwe, Paul. (2009) Government debt is both unsustainable and desirable. CEPS Commentary, 24 June 2009. [Policy Paper]
http://aei.pitt.edu/11277/
oai:aei.pitt.edu:11464
2011-02-15T23:14:48Z
7374617475733D707562
7375626A656374733D44:44303031:627564676574706F6C696379
7375626A656374733D44:44303032:44303032303035
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
The impact of the crisis on budget policy in Central and Eastern Europe. Bruegel Working Paper 2009/05, 31 July 2009
Darvas, Zsolt.
fiscal policy
EU-Central and Eastern Europe
financial crisis 2008-on/reforms/economic governance
budgets & financing
This paper describes the particular impacts of the financial and economic crisis on central and eastern European (CEE) countries, studies pro-cyclicality of fiscal policies, discusses the impact of the crisis on fiscal policy, and the policy response of various governments. After drawing some lessons for fiscal policy from previous emerging market crises, the paper concludes with some thoughts on the appropriate policy response from a more normative perspective. The key message of the paper is that the crisis should be used as an opportunity to introduce reforms to avoid future pro-cyclical fiscal policies, to increase the quality of budgeting and to increase credibility. These reforms should include fiscal responsibility laws comprising medium-term fiscal frameworks, fiscal rules, and independent fiscal councils. When fiscal consolidation is accompanied by fiscal reforms that increase credibility, non- Keynesian effects may offset to some extent the contraction caused by the consolidation.
2009-07
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11464/1/wp_cesee_crisis_310709.pdf
Darvas, Zsolt. (2009) The impact of the crisis on budget policy in Central and Eastern Europe. Bruegel Working Paper 2009/05, 31 July 2009. [Working Paper]
http://aei.pitt.edu/11464/
oai:aei.pitt.edu:11493
2011-02-15T23:14:59Z
7374617475733D707562
7375626A656374733D44:44303032:44303032696E7465726E6174696F6E616C65636F6E6F6D79
7375626A656374733D44:44303032:44303032303039
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153696E676C654D61726B6574:65666153696E676C654D61726B65746361706974616C676F6F64737365727669636573
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
Fiscal Stabilisation Plans and the Outlook for the World Economy. Do counter-cyclical fiscal measures offer any hope of recovery for the world economy? An evaluation of fiscal policy effectiveness in the face of a global recession. ENEPRI Working Papers No. 55, August 2009
Van Brusselen, Patrick.
EU-US
international economy
fiscal policy
capital, goods, services, workers
financial crisis 2008-on/reforms/economic governance
Since August 2007, the world economy has fallen into recession and been confronted by a severe financial crisis. In the midst of this global recession, what hope can we place in the fiscal stimulus plans that have been announced? This Working Paper evaluates whether the measures implemented in the euro area and the US will be adequate responses. It indicates that while these measures will undoubtedly prove useful in limiting the scale and duration of the downturn, they will not be sufficient by themselves to prevent a lengthy recession followed by a tepid recovery. The paper argues that to maximise the effectiveness of the stimulus plans, they should be accompanied by accommodative monetary policy. Furthermore, to accelerate and underpin a recovery in global economic activity, fiscal and monetary policies should also be supplemented by measures aimed at re-establishing banking and financial sectors that function properly.
2009-08
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11493/1/1895.pdf
Van Brusselen, Patrick. (2009) Fiscal Stabilisation Plans and the Outlook for the World Economy. Do counter-cyclical fiscal measures offer any hope of recovery for the world economy? An evaluation of fiscal policy effectiveness in the face of a global recession. ENEPRI Working Papers No. 55, August 2009. [Working Paper]
http://aei.pitt.edu/11493/
oai:aei.pitt.edu:11651
2020-02-28T14:44:56Z
7374617475733D707562
7375626A656374733D46:46303233
7375626A656374733D46:46303036
7375626A656374733D46:46303037
7375626A656374733D44:44303032:44303032303039
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666165636F6E6F6D6963706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
7375626A656374733D46:46303131
74797065733D776F726B696E677061706572
Estimating the Effects of Fiscal Policy in OECD Countries. ENEPRI Working Paper No. 15, October 2002
Perotti, Roberto.
EU-US
France
Germany
Italy
Spain
economic policy
fiscal policy
This paper studies the effects of fiscal policy on GDP, prices and interest rates in 5 OECD countries, using a structural Vector Autoregression approach. Its main results can be summarized as follows: 1)The estimated effects of fiscal policy on GDP tend to be small: positive government spending multipliers larger than 1 tend to be the exception; 2) The effects of fiscal policy on GDP and its components have become substantially weaker over time; 3) Under plausible values of the price elasticity, government spending has positive effects on the price level, although usually small; 4) Government spending shocks have significant effects on the nominal and real short interest rate, but of varying signs; 5) In the post-1980 period, net tax shocks have positive short run effects on the nominal interest rate, and typically negative or zero effects on prices; 6) The US is an outlier in many dimensions; responses to fiscal shocks estimated on US data are often not representative of the average OECD country included in this sample.
2002-10
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11651/1/1014.pdf
Perotti, Roberto. (2002) Estimating the Effects of Fiscal Policy in OECD Countries. ENEPRI Working Paper No. 15, October 2002. [Working Paper]
http://aei.pitt.edu/11651/
oai:aei.pitt.edu:11670
2011-02-15T23:16:01Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:44303031303335:737077656C666172657374617465
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
Fiscal Policy in the New Open Economy; Macroeconomics and Prospects for Fiscal Policy. Coordination; CEPS Working Document No. 193, June 2003
Coutinho, Leonor.
monetary policy
fiscal policy
welfare state
EMU/EMS/euro
This paper reviews the analysis of fiscal policy in the new open economy macroeconomics literature, in view of increasing interest in the question of transmission and coordination of policies across countries, stirred by developments in this literature and by the formation of the euro area. The analysis focuses on two main points: (i) the identification of welfare spillover effects to third countries; and (ii) the assessments made so far of the potential gains from pursuing non-cooperative and cooperative fiscal stabilisation policies. Regarding welfare spillovers, some additional results are derived to examine whether the exchange rate regime (flexible or fixed) matters for the size of these spillovers, and whether the type of policy pursued (balanced-budget or debtfinanced) matters. Fixed exchange rates only seem to postpone the costs from the short to the long run, but the type of policy is crucial in determining the welfare impact of fiscal expansions. With respect to policy coordination, attention is drawn to the need to reflect on a potential role for fiscal policy as a stabilisation tool, and on possible interactions between fiscal and monetary policy.
2003-06
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11670/1/1040.pdf
Coutinho, Leonor. (2003) Fiscal Policy in the New Open Economy; Macroeconomics and Prospects for Fiscal Policy. Coordination; CEPS Working Document No. 193, June 2003. [Working Paper]
http://aei.pitt.edu/11670/
oai:aei.pitt.edu:11672
2020-02-28T14:42:21Z
7374617475733D707562
7375626A656374733D46:46303233
7375626A656374733D46:46303036
7375626A656374733D46:46303037
7375626A656374733D44:44303032:44303032303039
7375626A656374733D46:46303236
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
7375626A656374733D46:46303131
74797065733D776F726B696E677061706572
Estimating the Effects of Fiscal Policy in OECD Countries. CEPS Working Document No. 190, October 2002
Perotti, Roberto.
EU-US
France
Germany
Italy
Spain
U.K.
fiscal policy
This paper studies the effects of fiscal policy on GDP, prices and interest rates in 5 OECD countries, using a structural Vector Autoregression approach. Its main results can be summarized as follows: 1) The estimated effects of fiscal policy on GDP tend to be small: positive government spending multipliers larger than 1 tend to be the exception; 2) The effects of fiscal policy on GDP and its components have become substantially weaker over time; 3) Under plausible values of the price elasticity, government spending has positive effects on the price level, although usually small; 4) Government spending shocks have significant effects on the nominal and real short interest rate, but of varying signs; 5) In the post-1980 period, net tax shocks have positive short run effects on the nominal interest rate, and typically negative or zero effects on prices; 6) The US is an outlier in many dimensions; responses to fiscal shocks estimated on US data are often not representative of the average OECD country included in this sample.
2002-10
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11672/1/100.pdf
Perotti, Roberto. (2002) Estimating the Effects of Fiscal Policy in OECD Countries. CEPS Working Document No. 190, October 2002. [Working Paper]
http://aei.pitt.edu/11672/
oai:aei.pitt.edu:11682
2011-02-15T23:16:06Z
7374617475733D707562
7375626A656374733D46:46303238
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303033:44303033303032
7375626A656374733D46:46303034
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
Who Needs an External Anchor? CEPS Working Document No. 161, March 2001
Gros, Daniel.
fiscal policy
Estonia
Bulgaria
enlargement
EMU/EMS/euro
This paper argues that there might be non-monotonic relationship between the strength of the domestic framework for fiscal policy and the interest of a country to use an external anchor to achieve price stability. Countries with a strong domestic framework, e.g. low public debt, little pressure for excessive expenditure and an efficient tax system, would anyway enjoy low inflation rates and therefore have little need for an external anchor. Countries with high debt or very weak institutions would greatly benefit from an external anchor to save them from the extreme inflation rates they would otherwise have to endure because the market knows that the temptation for them to inflate public debt away is so strong. By contrast, countries with moderately weaknesses might be in a situation where they need some inflation to supplement government revenues with seigniorage, but the inflation resulting from the interaction with the market, which knows about this, is still moderate. Applied to the enlargement process this implies that both countries with very strong and those with very weak institutions might have an interest in joining the euro area quickly. The choices of Estonia (very strong) and Bulgaria (very weak), to adopt the euro/DM via currency boards, seem to reflect these considerations.
2001-03
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/11682/1/71.pdf
Gros, Daniel. (2001) Who Needs an External Anchor? CEPS Working Document No. 161, March 2001. [Working Paper]
http://aei.pitt.edu/11682/
oai:aei.pitt.edu:12366
2011-02-15T23:20:12Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
Monetary Policy on the Way Out of the Crisis. Bruegel Policy Contribution 2009/15, December 2009
von Hagen, Jürgen.
fiscal policy
monetary policy
financial crisis 2008-on/reforms/economic governance
Senior Non-Resident Fellow Jürgen von Hagen offers his recommendations for the proper monetary policy to lead the eurozone out of the crisis. He argues that the tentative recovery in the euro area indicates that both monetary and fiscal policy can be normalised soon. However, because delaying fiscal consolidation would result in greater debt burdens whereas monetary policy can be quickly adjusted to respond to unforeseen developments, there is less risk involved if a fiscal exit comes first. In any case, the two strategies must be coordinated and the European Central Bank must be very clear on its interest rate policies. This paper was prepared as part of testimony for the European Parliament's Economic and Monetary Affairs Committee.
2009-12
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/12366/1/pc_monpolicy_171209.pdf
von Hagen, Jürgen. (2009) Monetary Policy on the Way Out of the Crisis. Bruegel Policy Contribution 2009/15, December 2009. [Policy Paper]
http://aei.pitt.edu/12366/
oai:aei.pitt.edu:13911
2011-02-15T23:30:02Z
7374617475733D707562
7375626A656374733D46:46303038
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
The Blue Bond Proposal. Bruegel Policy Brief 2010/03, May 2010
Delpla, Jacques
von Weizsacker, Jakob.
fiscal policy
financial crisis 2008-on/reforms/economic governance
Greece
How can the euro area's return to fiscal sustainability be organised in view of soaring debt levels and the sovereign debt crisis? How can we finance our debts efficiently, not least to prevent debt crises in weaker countries where high debt levels compounded by a hike in risk premiums on government bonds can create a debt trap? This looks like a classic dilemma. European solidarity with the most vulnerable European Union countries runs the risk of further weakening the incentives for individual countries to pursue fiscally sustainable policies. While not a quick fix, our Blue Bond proposal charts an incentive-driven and durable way out of this dilemma while helping prepare the ground for the rise of the euro as an important reserve currency, which could reduce borrowing costs for everybody involved. Soaring debt levels and the crisis in Greece has sharpened the focus on fiscal sustainability among eurozone members. The European Union has to tackle high debt levels in vulnerable states which are compounded by a hike in risk premiums on government bonds leading to a debt trap, while designing ways to efficiently finance debt. Furthermore, European solidarity with weaker states should not undermine incentives for individual members to pursue fiscally sustainable policies. This Policy Brief proposes a Blue Bond to resolve these challenges. The authors...explain the economics behind their proposal, its institutional underpinnings and the implication of it on various participating countries.
2010-05
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/13911/1/1005%2DPB%2DBlue_Bonds.pdf
Delpla, Jacques and von Weizsacker, Jakob. (2010) The Blue Bond Proposal. Bruegel Policy Brief 2010/03, May 2010. [Policy Paper]
http://aei.pitt.edu/13911/
oai:aei.pitt.edu:14328
2011-02-15T23:32:50Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303032:44303032303039
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
Fiscal federalism in crisis: lessons for Europe from the US. Bruegel Policy Contribution 2010/07, July 2010
Darvas, Zsolt.
EU-US
fiscal policy
financial crisis 2008-on/reforms/economic governance
EMU/EMS/euro
Drawing comparisons between the fiscal situation in the US and the European Union, Bruegel Research Fellow Zsolt Darvas answers three questions in this Policy Contribution- Why has the euro been hit so hard? How would a more federal European fiscal union closer to the US model have helped? How do the euro area’s fiscal architecture reform plans stand up in light of the US example? The author analyses why current fiscal reform proposals if implemented will result in improvements but implementation could be deficient or lack credibility and can lead to disputes and carry political risk.
2010-07
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/14328/1/pc_2010_07_fiscalfed_090710%2D2.pdf
Darvas, Zsolt. (2010) Fiscal federalism in crisis: lessons for Europe from the US. Bruegel Policy Contribution 2010/07, July 2010. [Policy Paper]
http://aei.pitt.edu/14328/
oai:aei.pitt.edu:14539
2011-02-15T23:34:25Z
7374617475733D707562
7375626A656374733D45:45303033
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
To coordinate or not to coordinate? CEPS Commentaries, 7 October 2009
De Grauwe, Paul.
fiscal policy
G7/G8/G20
A key question confronting the G20 leaders is the desirability of coordinating exit strategies. Empirical research suggests that demand spillovers from fiscal policy are sufficiently small that uncoordinated exits from fiscal stimulus programmes are unlikely to threaten global demand. This Commentary by Paul De Grauwe argues that that research is flawed as it was based on data and theory for economies near full employment – not today’s situation. He concludes that G20 leaders need to address fiscal and monetary stimulus coordination exit strategies.
2009-10
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/14539/1/To_coordinate_or_not.pdf
De Grauwe, Paul. (2009) To coordinate or not to coordinate? CEPS Commentaries, 7 October 2009. [Policy Paper]
http://aei.pitt.edu/14539/
oai:aei.pitt.edu:14980
2011-02-15T23:37:31Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
Fiscal policy coordination and competitiveness surveillance: what solutions to what problems? CEPS Policy Brief No. 213/September 2010
Gros, Daniel
Alcidi, Cinzia.
fiscal policy
Close coordination of national fiscal policy and surveillance of competitiveness seem highly desirable within a monetary union. But are they also feasible? This note argues that surveillance of competitiveness risks concentrating on symptoms (rising wages in the non-tradable sector), rather than the underlying causes (credit-financed booms). Moreover, the economic rationale for fiscal policy coordination (beyond the strict enforcement of the Stability and Growth Pact – SGP) seems to be weak during normal times. While it makes sense to coordinate the fiscal response of member states to the present crisis, it does not seem appropriate to develop new permanent mechanisms for the coordination of national fiscal policy.
2010-09
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/14980/1/PB213_Gros_%26_Alcidi_on_Fiscal_Policy_Coordination.pdf
Gros, Daniel and Alcidi, Cinzia. (2010) Fiscal policy coordination and competitiveness surveillance: what solutions to what problems? CEPS Policy Brief No. 213/September 2010. [Policy Paper]
http://aei.pitt.edu/14980/
oai:aei.pitt.edu:15184
2016-01-30T17:22:07Z
7374617475733D707562
7375626A656374733D44:44303032:44303032303232
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303032:44303032303230
7375626A656374733D44:44303032:44303032303035
7375626A656374733D44:44303032:44303032303136
7375626A656374733D44:44303032:44303032303130
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153696E676C654D61726B6574:65666153696E676C654D61726B65746361706974616C676F6F64737365727669636573
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
Whither growth in Central and Eastern Europe? Policy lessons for an integrated Europe. Bruegel Blueprint Series No. 11, November 2010
Becker, Torbjorn
Daianu, Daniel
Darvas, Zsolt
Gligorov, Vladimir
Landesmann, Michael
Petrovic, Pavle
Pisani-Ferry, Jean
Rosati, Dariusz
Sapir, Andre
Weder di Mauro, Beatrice.
EU-South-Eastern Europe (Balkans)
monetary policy
fiscal policy
capital, goods, services, workers
regionalism, international
EU-Central and Eastern Europe
financial crisis 2008-on/reforms/economic governance
EU-Latin America
EMU/EMS/euro
EU-Asia-general
This report examines the impact of the economic crisis on the countries of central and eastern Europe (CESEE) and draws out the main policy lessons. Until the crisis hit, CESEE countries had been pursuing a distinctive model of growth and catch-up through integration with the European Union, although not all countries had achieved the same level of integration with the EU. The crisis was a major challenge for the policies pursued in many CESEE countries, and the region was hit by the crisis much harder than other parts of the emerging world, and is also recovering more slowly. In chapter 1, we compare the pre-crisis development model of the central, eastern and south-eastern Europe (CESEE) region with similar countries in Asia and Latin America and study the impact of the crisis. We highlight that the CESEE growth model was fundamentally different from models in other emerging country regions, but also that it had two variants. The first, which characterised most central European countries, was by and large appropriate and sustainable. But there is a second group of CESEE countries (we call it the Baltic-Balkan group) in which the same overall growth model led to widespread misallocation of resources and unsustainable growth trajectories. These countries are undergoing a much more painful recovery from the crisis. In chapter 2 we scrutinise more closely the growth model of the region. We study the short-run challenges and the medium- to longer-run issues, focusing on behavioural adjustments occurring within the countries of the region in the wake of the crisis and on changes in the external environment. We discuss policy issues to make the re-oriented growth model sustainable and successful. Chapters 3, 4 and 5 examine three key policy areas: exchange-rate policy, financial stability and fiscal sustainability. We identify a strong role for exchange-rate policy both in the unsustainable pre-crisis developments of a number of countries and in their dramatic response to the crisis. However, concerning the other two main policy areas, it is true more generally that even more conservative domestic financial regulation and supervision and fiscal policy could not have crisis-proofed those CESEE countries which, even before the crisis, had double-digit current-account deficits. Looking forward, improving supply side conditions and competitiveness will be a key challenge for most countries in the region. Massive cross-border holdings in CESEE banks pose significant challenges to financial regulation and we highlight a large number of unresolved issues, while for fiscal sustainability we are cautiously optimistic, but certainly more optimistic than most analysts who call for overly strict, and hence pro-cyclical, fiscal policy. In our concluding chapter 6, we raise policy issues for the CESEE countries and the EU. The general conclusion is that the benefits of EU integration for countries that are catching up are conditional on the quality of national policies and of the EU framework itself. In both respects we point out past failings and suggest strategic improvements. Reorienting the growth model in those countries that entered a shunt-line before the crisis will be hard because of their legacies, but that there is no other path to follow in order to make the EU’s eastern enlargement a lasting economic success story.
2010-11
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/15184/1/101124_bp_zd_whither_growth.pdf
Becker, Torbjorn and Daianu, Daniel and Darvas, Zsolt and Gligorov, Vladimir and Landesmann, Michael and Petrovic, Pavle and Pisani-Ferry, Jean and Rosati, Dariusz and Sapir, Andre and Weder di Mauro, Beatrice. (2010) Whither growth in Central and Eastern Europe? Policy lessons for an integrated Europe. Bruegel Blueprint Series No. 11, November 2010. [Policy Paper]
http://aei.pitt.edu/15184/
oai:aei.pitt.edu:15471
2011-02-15T23:41:00Z
7374617475733D707562
7375626A656374733D46:46303231
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
Slovakia's courageous gimmick. CEPS Commentary, 14 January 2011
Beblavy, Miroslav.
fiscal policy
Slovak Republic
financial crisis 2008-on/reforms/economic governance
To help both the United States and Europe grapple with their rising levels of government debt and large budget deficits, this Commentary suggests that EU policy-makers might be well advised to consider an innovative albeit quirky approach devised by Slovakia to deal with the problem, in which the personal prosperity of top national officials is based not only on wage developments in the economy, but also on the country’s fiscal prudence.
2011-01
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/15471/1/MB_on_Slovakia's_courageous_gimmick.pdf
Beblavy, Miroslav. (2011) Slovakia's courageous gimmick. CEPS Commentary, 14 January 2011. [Policy Paper]
http://aei.pitt.edu/15471/
oai:aei.pitt.edu:15765
2011-02-15T23:42:50Z
7374617475733D707562
7375626A656374733D44:44303032:44303032303035
7375626A656374733D44:44303032:44303032303130
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
The fiscal and monetary institutions of CESEE countries. Bruegel Working Paper 2011/02, February 2011
Darvas, Zsolt
Kostyleva, Valentina.
EU-South-Eastern Europe (Balkans)
monetary policy
fiscal policy
EU-Central and Eastern Europe
financial crisis 2008-on/reforms/economic governance
This working paper by Zsolt Darvas and Valentina Kostyleva examines the role of fiscal and monetary institutions in macroeconomic stability and budgetary control in CESEE (central, eastern and south eastern European) countries in comparison to other OECD countries. Budgetary discipline indexes suggest that fiscal institutions are weaker in most CESEE countries than in non-CESEE OECD countries. these factors call for improved monetary institutions, stronger fiscal rules, and better budgetary procedures.
2011-02
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/15765/1/Zsolt_Darvas_WP_2011_02%2D2.pdf
Darvas, Zsolt and Kostyleva, Valentina. (2011) The fiscal and monetary institutions of CESEE countries. Bruegel Working Paper 2011/02, February 2011. [Working Paper]
http://aei.pitt.edu/15765/
oai:aei.pitt.edu:30391
2011-03-24T15:15:27Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
Eurobonds: The blue bond concept and its implications. Bruegel Policy Contribution 2011/02, March 2011
Delpla, Jacques
von Weizsäcker, Jakob.
fiscal policy
financial crisis 2008-on/reforms/economic governance
The Blue Bond proposal, published in May 2010 (Bruegel Policy Brief 2010/03) suggests that sovereign debt in euro-area countries be split into two parts. The first part, the senior ‘Blue’ tranche of up to 60 percent of GDP,
would be pooled among participating countries and jointly and severally guaranteed. The second part, the junior ‘Red’ tranche, would keep debt in excess of 60 percent of GDP as a purely national responsibility. This paper
revisits the proposal, discusses its implications and addresses some of the comments and criticisms received in response to the proposal. This paper was prepared for the European Parliament’s Economic and Monetary
Affairs Committee, session of 21 March 2011 on the interaction between bank and sovereign debt resolution.
2011-03
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/30391/1/Eurobonds__The_blue_bond_concept_and_its_implications_(English)%2D1.pdf
http://www.bruegel.org/publications/publication-detail/publication/509-eurobonds-the-blue-bond-concept-and-its-implications/
Delpla, Jacques and von Weizsäcker, Jakob. (2011) Eurobonds: The blue bond concept and its implications. Bruegel Policy Contribution 2011/02, March 2011. [Policy Paper]
http://aei.pitt.edu/30391/
oai:aei.pitt.edu:32316
2011-08-23T13:16:42Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
7375626A656374733D44:44303035:44303035303039
74797065733D706F6C6963797061706572
The Eurozone Debt Crisis: From its origins to a way forward. CEPS Policy Brief No. 251, August 2011
Valiante, Diego.
European Central Bank
EMU/EMS/euro
fiscal policy
financial crisis 2008-on/reforms/economic governance
As the Eurozone debt crisis reaches a turning point, this Policy Brief argues for a more organised intervention by the ECB to stop contagion through the creation of a quantitative easing programme, coupled with a political agreement among member states on a more federalist budget for the Eurozone.
The roots of this crisis and how institutions have repeated some of the mistakes of the Argentine crisis, both in 1998 and 2010, are considered in this paper. The author analyses the reasons why the ECB should start a quantitative easing programme to contain government bond yields, and shows that it can be done with limited impact on inflation targeting policies. The importance of reinforcing the new policy announced by the ECB, which has lain rather dormant during the Eurozone crisis, is also highlighted as a pre-condition for a broader political agreement on more harmonised fiscal policies and to stabilise market conditions. Valiante finds that responses should be organised on three levels: institutional competences, monetary policy support, and fiscal policy coordination.
2011-08
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/32316/1/PB_251_Valiante_on_Euro_Crisis.pdf
http://shop.ceps.eu/book/eurozone-debt-crisis-its-origins-way-forward
Valiante, Diego. (2011) The Eurozone Debt Crisis: From its origins to a way forward. CEPS Policy Brief No. 251, August 2011. [Policy Paper]
http://aei.pitt.edu/32316/
oai:aei.pitt.edu:32338
2011-09-06T14:02:27Z
7374617475733D707562
7375626A656374733D44:44303031:627564676574706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
Balanced budget fundamentalism. CEPS Commentary, 5 August 2011
De Grauwe, Paul.
budgets & financing
fiscal policy
financial crisis 2008-on/reforms/economic governance
Under extreme pressure from the financial markets and from Germany, member countries of the eurozone feel obliged to introduce balanced budget clauses into their constitutions.
In this new Commentary, CEPS Senior Associate Research Fellow Paul De Grauwe explains why the balanced budget rule is a bad idea.
2011-09
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/32338/1/De_Grauwe_on_Balanced_budget_fundamentalism_September_2011.pdf
http://shop.ceps.eu/book/balanced-budget-fundamentalism
De Grauwe, Paul. (2011) Balanced budget fundamentalism. CEPS Commentary, 5 August 2011. [Policy Paper]
http://aei.pitt.edu/32338/
oai:aei.pitt.edu:32448
2011-09-10T13:51:50Z
7374617475733D707562
7375626A656374733D46:46303038
7375626A656374733D44:44303031:44303031303335:737067656E6572616C
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666165636F6E6F6D6963706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
spotlight europe #2011/04 - September 2011. European Economic Governance. And what is about the social dimension?
Fischer, Thomas
Hoffmann, Sarah
Greece
economic policy
fiscal policy
financial crisis 2008-on/reforms/economic governance
general
The outbreak of the Greek crisis has prompted the European Union to set about designing a comprehensive kind of economic governance architecture in which greater coordination of economic and fiscal policy will underpin and support the common monetary policy of the eurozone. The goal is greater fiscal discipline and competitiveness in all of the EU member states. Yet in the process policymakers are running the danger of weakening social cohesion in the EU.
2011-09
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/32448/1/spotlight_European_Economic_Governance_engl.pdf
http://www.bertelsmann-stiftung.de/cps/rde/xchg/SID-DC7B920F-6D5543B0/bst/hs.xsl/5999_79622.htm
Fischer, Thomas and Hoffmann, Sarah (2011) spotlight europe #2011/04 - September 2011. European Economic Governance. And what is about the social dimension? [Policy Paper]
http://aei.pitt.edu/32448/
oai:aei.pitt.edu:32449
2011-09-10T13:54:00Z
7374617475733D707562
7375626A656374733D46:46303038
7375626A656374733D44:44303031:44303031303335:737067656E6572616C
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666165636F6E6F6D6963706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
spotlight europe #2011/04 - September 2011. European Economic Governance: Wo bleibt die sozialer Dimension? = European Economic Governance: What about the social dimension?
Fischer, Thomas
Hoffmann, Sarah
Greece
economic policy
fiscal policy
financial crisis 2008-on/reforms/economic governance
general
The outbreak of the Greek crisis has prompted the European Union to set about designing a comprehensive kind of economic governance architecture in which greater coordination of economic and fiscal policy will underpin and support the common monetary policy of the eurozone. The goal is greater fiscal discipline and competitiveness in all of the EU member states. Yet in the process policymakers are running the danger of weakening social cohesion in the EU.
2011-09
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/32449/1/spotlight_European_Economic_Governance_dt.pdf
http://www.bertelsmann-stiftung.de/cps/rde/xchg/SID-DC7B920F-6D5543B0/bst/hs.xsl/5999_79622.htm
Fischer, Thomas and Hoffmann, Sarah (2011) spotlight europe #2011/04 - September 2011. European Economic Governance: Wo bleibt die sozialer Dimension? = European Economic Governance: What about the social dimension? [Policy Paper]
http://aei.pitt.edu/32449/
oai:aei.pitt.edu:32482
2011-09-21T14:10:32Z
7374617475733D707562
7375626A656374733D46:46303038
7375626A656374733D44:44303031:44303031303335:737067656E6572616C
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666165636F6E6F6D6963706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
spotlight europe # 2011/04 – septiembre de 2011. La gobernanza económica europea: ¿dónde queda la dimensión social? = European economic governance: what about social policy?
Fischer, Thomas
Hoffmann, Sarah
Greece
economic policy
fiscal policy
financial crisis 2008-on/reforms/economic governance
general
No abstract.
2011-09
Policy Paper
NonPeerReviewed
other
http://aei.pitt.edu/32482/1/xcms_bst_dms_34646_34647_2.pdf
http://www.bertelsmann-stiftung.de/cps/rde/xbcr/SID-C50F9290-1FA16C60/bst/xcms_bst_dms_34646_34647_2.pdf
Fischer, Thomas and Hoffmann, Sarah (2011) spotlight europe # 2011/04 – septiembre de 2011. La gobernanza económica europea: ¿dónde queda la dimensión social? = European economic governance: what about social policy? [Policy Paper]
http://aei.pitt.edu/32482/
oai:aei.pitt.edu:32568
2011-12-30T16:41:21Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
7375626A656374733D44:44303035:44303035303039
74797065733D626F6F6B
Fiscal and Monetary Policy for a Low-Speed Europe, 4th Annual Report of the CEPS Macroeconomic Policy Group. CEPS Paperback. June 2002
Gros, Daniel
Durrer, Klaus
Jimeno, Juan
Monticelli, Carlo
Perotti, Roberto
European Central Bank
fiscal policy
monetary policy
financial crisis 2008-on/reforms/economic governance
This is the fourth in a series of annual reports produced by the CEPS Macroeconomic Policy Group (MPG), composed of distinguished economists from throughout Europe who have undertaken to carry out independent, in-depth research on current developments in the European economy. This year’s report documents two long-run developments: the decline of productivity in Europe and the growing ineffectiveness of fiscal policy. Against this background, the ECB’s room for manoeuvre is also explored and found to be inadequate.
2002-06
Book
NonPeerReviewed
application/pdf
http://aei.pitt.edu/32568/1/7._Fiscal_and_Monetary_Policy_for_a_Low%2DSpeed_Europe.pdf
http://www.ceps.be/book/fiscal-and-monetary-policy-low-speed-europe-4th-annual-report-ceps-macroeconomic-policy-group
Gros, Daniel and Durrer, Klaus and Jimeno, Juan and Monticelli, Carlo and Perotti, Roberto (2002) Fiscal and Monetary Policy for a Low-Speed Europe, 4th Annual Report of the CEPS Macroeconomic Policy Group. CEPS Paperback. June 2002. Series > Centre for European Policy Studies (Brussels) > CEPS Paperbacks <http://aei.pitt.edu/view/series/SMCEPSPaperbacks.html> . UNSPECIFIED. ISBN 9290793844
http://aei.pitt.edu/32568/
oai:aei.pitt.edu:32577
2011-12-30T20:58:16Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:44303031303138:656C6D6C61626F75726C61626F72
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7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
7375626A656374733D44:44303035:44303035303039
74797065733D626F6F6B
Adjusting to Leaner Times. 5th Annual Report of the CEPS Macroeconomic Policy Group. CEPS Paperback. July 2003
Jimeno, Juan F.
Mayer, Thomas
Thygesen, Niels
Ubide, Angel
Gros, Daniel
European Central Bank
EMU/EMS/euro
fiscal policy
monetary policy
labour/labor
This is the fifth in a series of annual reports produced by the CEPS Macroeconomic Policy Group (MPG), composed of distinguished economists from throughout Europe who have undertaken to carry out independent, in-depth research on current developments in the European economy. This year’s report documents the ongoing slowdown in productivity growth in Euroland and concludes that it cannot be cured by an expansionary fiscal policy. On the contrary, governments should concentrate on pension reform and cuts in age-related entitlements, in view of their rapidly ageing populations. The group broadly welcomes the strategic review underway at the European Central Bank, but the ECB should look more at financial structures than at money supply numbers. The report also advocates the creation of a ‘Mr Euro’.
2003-07
Book
NonPeerReviewed
application/pdf
http://aei.pitt.edu/32577/1/16._Adjusting_to_Leaner_Times.pdf
http://www.ceps.be/book/adjusting-leaner-times-5th-annual-report-ceps-macroeconomic-policy-group
Jimeno, Juan F. and Mayer, Thomas and Thygesen, Niels and Ubide, Angel and Gros, Daniel (2003) Adjusting to Leaner Times. 5th Annual Report of the CEPS Macroeconomic Policy Group. CEPS Paperback. July 2003. Series > Centre for European Policy Studies (Brussels) > CEPS Paperbacks <http://aei.pitt.edu/view/series/SMCEPSPaperbacks.html> . UNSPECIFIED. ISBN 9290794437
http://aei.pitt.edu/32577/
oai:aei.pitt.edu:32579
2011-12-30T20:53:02Z
7374617475733D707562
7375626A656374733D46:46303036
7375626A656374733D44:44303033:44303033303038
7375626A656374733D46:46303037
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74797065733D626F6F6B
The Nine Lives of the Stability Pact. A special report of the CEPS Macroeconomic Policy Group. CEPS Paperback. February 2004
Gros, Daniel
Mayer, Thomas
Ubide, Angel
Maastricht Treaty
France
Germany
Stability and Growth Pact
economic policy
fiscal policy
This special report by the CEPS Macroeconomic Policy Group (MPG) is concerned with the implementation of the prohibition of excessive deficits contained in the Treaty of Maastricht via the Stability and Growth Pact. Specifically, it deals with the controversy that was provoked by the failure of the ECOFIN Council of 25 November 2003, to endorse recommendations of the European Commission to put France and Germany on notice that they had violated the Treaty’s prohibition of excessive deficits. The CEPS MPG finds that the core of the dispute arises not so much from the Stability Pact, but from the 3% limit set in the Treaty. It asserts that this clause should not be altered, as argued by many observers, and that it is even more appropriate now, than when it was first agreed in 1991, because of the slowdown of potential growth in Europe.
The CEPS MPG is composed of distinguished economists who have undertaken to carry out independent, in-depth research on current developments in the European economy.
2004-02
Book
NonPeerReviewed
application/pdf
http://aei.pitt.edu/32579/1/18._The_Nine_Lives_of_the_Stability_Pact.pdf
http://www.ceps.be/book/nine-lives-stability-pact
Gros, Daniel and Mayer, Thomas and Ubide, Angel (2004) The Nine Lives of the Stability Pact. A special report of the CEPS Macroeconomic Policy Group. CEPS Paperback. February 2004. Series > Centre for European Policy Studies (Brussels) > CEPS Paperbacks <http://aei.pitt.edu/view/series/SMCEPSPaperbacks.html> . UNSPECIFIED. ISBN 9290794720
http://aei.pitt.edu/32579/
oai:aei.pitt.edu:32582
2011-12-31T14:34:47Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
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7375626A656374733D46:466A6170616E
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7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:44303031303139
7375626A656374733D46:666368696E61
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
7375626A656374733D44:44303035:44303035303039
74797065733D626F6F6B
Breaking the Reform Deadlock. 6th Annual Report of the CEPS Macroeconomic Policy Group. CEPS Paperback. July 2004
Mayer, Thomas
Ubide, Angel
Gros, Daniel
Perotti, Roberto
energy policy (Including international arena)
international economy
enlargement
European Central Bank
Japan
EMU/EMS/euro
economic policy
fiscal policy
monetary policy
China
Euroland is now in its fourth year of unsatisfactory growth. What are the reasons for this and what can be done about it? This report arrives at the following conclusions:
1. Demographic change is already now reducing the growth potential and squeezing government finances.
2. Insufficient investment is the main driver of the productivity slowdown that has weakened growth.
3. To stimulate investment, better coordination among fiscal, structural and monetary policy is needed: Ideally a combination of structural reform, fiscal consolidation and low interest rates. The ECB – as the only widely respected economic policy-making institution in the EU with room for manoeuvre – should become more proactive in pursuing economic policy coordination in order to obtain more progress on structural reform and fiscal consolidation.
4. To foster a more balanced expansion of the world economy and reduce the risk of brutal exchange rate movements, greater cooperation among the central banks of the US, the EU, Japan and China is needed, giving rise to a G4.
2004-07
Book
NonPeerReviewed
application/pdf
http://aei.pitt.edu/32582/1/21._Breaking_Reform_Deadlock.pdf
http://www.ceps.be/book/breaking-reform-deadlock-6th-annual-report-ceps-macroeconomic-policy-group
Mayer, Thomas and Ubide, Angel and Gros, Daniel and Perotti, Roberto (2004) Breaking the Reform Deadlock. 6th Annual Report of the CEPS Macroeconomic Policy Group. CEPS Paperback. July 2004. Series > Centre for European Policy Studies (Brussels) > CEPS Paperbacks <http://aei.pitt.edu/view/series/SMCEPSPaperbacks.html> . UNSPECIFIED. ISBN 9290795034
http://aei.pitt.edu/32582/
oai:aei.pitt.edu:33072
2013-01-08T22:09:30Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D636F6E666572656E63655F6974656D
Monetary and Fiscal Policy Interaction: The Consequences of Joining a Monetary Union
Jones, Jason Cannon
EMU/EMS/euro
fiscal policy
monetary policy
The great experiment in monetary unification across Europe is just beginning to provide the data
needed to test the theories and debates surrounding the costs and benefits of forming a union. This
paper will explore one particular aspect of the unification process, the effect it had on monetary and
fiscal strategic interaction. Using a panel structural VAR to measure monetary and fiscal policy
interaction among EMU members before and after joining the EMU, a difference in this interaction is
detected. Pre‐EMU the monetary and fiscal authority acted as strategic substitutes in the case of a
monetary response to a fiscal receipts shock (such as a discretionary increase in taxes). After the
formation of the union this relationship disappears and there is no strategic interaction. The timing of
the change suggests a role for the Maastricht treaty coupled with the weak SGP
2009
Conference or Workshop Item
NonPeerReviewed
application/pdf
http://aei.pitt.edu/33072/1/jones._jason_cannon.pdf
http://www.euce.org/eusa2009/papers.php
Jones, Jason Cannon (2009) Monetary and Fiscal Policy Interaction: The Consequences of Joining a Monetary Union. In: UNSPECIFIED.
http://aei.pitt.edu/33072/
oai:aei.pitt.edu:33754
2014-04-08T16:18:58Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
The Euro Prisoner's Dilemma. ECMI Commentary No. 32, February 2012
Valiante, Diego
EMU/EMS/euro
fiscal policy
financial crisis 2008-on/reforms/economic governance
The last intergovernmental agreement among 25 countries and the ESM Treaty will set the ground for greater institutional coordination on fiscal policies among euro area member states. None of these decisions, however, will be able to pull the euro area out of this crisis. The eurozone is trapped in a classic prisoner’s dilemma. The break-up of the euro remains unlikely but the exit strategy will continue to be led by a sequence of rational (but sub-optimal) decisions, which will make the process long and painful.
2012-02
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/33754/1/ECMI_Commentary_No_32_DV_Euro_Prisoner's_Dilemma.pdf
http://shop.ceps.eu/book/euro-prisoner%E2%80%99s-dilemma
Valiante, Diego (2012) The Euro Prisoner's Dilemma. ECMI Commentary No. 32, February 2012. [Policy Paper]
http://aei.pitt.edu/33754/
oai:aei.pitt.edu:33831
2014-10-16T15:38:47Z
7374617475733D707562
7375626A656374733D46:46303233
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
Spain and the fiscal compact
Wolff, Guntram B.
Spain
fiscal policy
financial crisis 2008-on/reforms/economic governance
The announcement by Mariano Rajoy, the Spanish prime minister, not to stick to the fiscal target agreed by the previous government is likely to be a game changer of the European governance debate. On the day of the signing of the fiscal compact, its spirit is put under test by one of the largest countries in EMU.
2012-03
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/33831/1/The_announcement_by_Mariano_Rajoy.pdf
http://www.bruegel.org/publications/publication-detail/publication/712-spain-and-the-fiscal-compact/
Wolff, Guntram B. (2012) Spain and the fiscal compact. [Policy Paper]
http://aei.pitt.edu/33831/
oai:aei.pitt.edu:34052
2012-03-19T19:43:22Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
Towards a Credible Excessive Deficits Procedure. CEPS Working Document No. 95, July 1995
Gros, Daniel.
fiscal policy
In 1995, when this paper was written, Daniel Gros pointed out that the Excessive Deficits Procedure lacked a strong enforcement mechanism. In particular he noted that the normal enforcement mechanisms of the Treaty (i.e. recourse to the European Court of Justice) cannot be used to ensure that member states obey the prohibition of excessive deficits. Instead the entire excessive deficits procedure has been assigned to the ECOFIN Council, which (as he predicted correctly) has never been able to agree tough measures towards member countries that have clearly not followed its recommendations. Hence, Gros doubted that the prohibition of excessive deficits would be enforced effectively once EMU has started.
To strengthen the enforcement mechanism of the excessive deficits procedure, his paper contained the following concrete proposal:
"First, countries with an excessive deficit should be automatically required to sequester spending and increase taxes. Second, if they do not follow this last call to order, they should be relegated to an associated status in EMU. ECOFIN would have no discretion in this procedure and only the countries that are in EMU should be allowed to participate in these decisions."
Some elements of this proposal can clearly be seen in the tightening in the new governance rules which were adopted in 2010 and 2011.
1995
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/34052/1/wd95%2D2.pdf
http://shop.ceps.eu/book/towards-credible-excessive-deficits-procedure
Gros, Daniel. (1995) Towards a Credible Excessive Deficits Procedure. CEPS Working Document No. 95, July 1995. [Working Paper]
http://aei.pitt.edu/34052/
oai:aei.pitt.edu:35878
2012-07-20T14:59:18Z
7374617475733D707562
7375626A656374733D46:46303233
7375626A656374733D46:46303036
7375626A656374733D46:46303037
7375626A656374733D46:46303031
7375626A656374733D44:44303031:44303031303435
7375626A656374733D46:46303236
7375626A656374733D46:46303039
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
7375626A656374733D46:46303131
7375626A656374733D44:44303031:44303031303234
74797065733D706F6C6963797061706572
The triggers of competitiveness: the EFIGE cross-country report. Bruegel Blueprint 17, 17 July 2012
Altomonte, Carlo
Aquilante, Tomasso
Ottaviano, Gianmarco I.P.
industrial policy
innovation policy
Austria
France
Germany
Hungary
Italy
Spain
U.K.
fiscal policy
There is a pressing need for Europe to grow out of the crisis, meaning that Europe needs to become more competitive, enabling it to capture growth currently taking place mainly in emerging markets. But what are the triggers of competitiveness? The EFIGE project, led by Bruegel, takes a fresh look by inquiring into the determinants of firm-level international performance – focusing on external competitiveness. In the competitiveness debate, it is crucial to understand not only the macroeconomic challenge, but also to find the right micro-level triggers that will generate growth and exports.
The authors identify firm-level total factor productivity as a major determinant of growth and exports. Human capital, research, equity finance and performance based incentives for employees also play their parts. Moreover, size matters and large firms typically are much better exporters than their smaller counterparts.
This report builds on previous EFIGE research and studies in depth firm performance in seven countries (Austria, France, Germany, Hungary, Italy, Spain, United Kingdom) to identify the triggers of competitiveness.
2012-07
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/35878/1/The_triggers_of_competitiveness__The_EFIGE_cross%2Dcountry_report_(English)_(English).pdf
http://www.bruegel.org/publications/publication-detail/view/738/
Altomonte, Carlo and Aquilante, Tomasso and Ottaviano, Gianmarco I.P. (2012) The triggers of competitiveness: the EFIGE cross-country report. Bruegel Blueprint 17, 17 July 2012. [Policy Paper]
http://aei.pitt.edu/35878/
oai:aei.pitt.edu:36063
2014-07-18T01:11:12Z
7374617475733D707562
7375626A656374733D44:44303032:44303032303039
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
Adjusting to a credit cycle bust: The role of fiscal policy. CEPS Commentary, 27 July 2012
Gros, Daniel
EU-US
fiscal policy
financial crisis 2008-on/reforms/economic governance
In response to the often-heard accusation that “austerity is killing growth in Europe”, Daniel Gros asks in this new Commentary: “What austerity?” Looking at the entire budget cycle, he finds that the picture of austerity killing growth simply does not hold up. Since the bursting of the bubble in 2007, Gros reports that the economic performance of the US has been very similar to that of the euro area: GDP per capita is today about 2% below the 2007 level on both sides of the Atlantic; and the unemployment rate has increased by about the same amount as well: it increased by 3% both in the US and the euro area. Thus, he concludes that over a five-year period, the US has not done any better than the euro area although it has used a much larger dose of fiscal expansion.
2012-07
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/36063/1/DG_on_Austerity.pdf
http://www.ceps.be/book/adjusting-credit-cycle-bust-role-fiscal-policy
Gros, Daniel (2012) Adjusting to a credit cycle bust: The role of fiscal policy. CEPS Commentary, 27 July 2012. [Policy Paper]
http://aei.pitt.edu/36063/
oai:aei.pitt.edu:36282
2012-08-19T13:17:18Z
7374617475733D707562
7375626A656374733D44:44303035:69646F7067:69646F7067646D706D
7375626A656374733D44:44303031:706F6C69746963616C6166666169727331323334:70616666707569657075
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
The challenges of Europe's fourfold union. Bruegel Policy Contribution 2012/13, 16 August 2012
Véron, Nicolas.
fiscal policy
decision making/policy-making
political union & integration/European Political Union
Five years after the first tremors in Europe’s banking system, what makes the crisis unique is the absence of a democratically accountable decision-making framework; there is an 'executive deficit' that compounds Europe’s democratic deficit. The author argues that the only way to resolve the crisis successfully is a sustained effort to achieve a 'fourfold union' agenda: banking union, fiscal union, competitiveness union and political union. Progress must be made in parallel on each of the four components. In particular, successful progress towards banking union requires a combination of short term action, including the establishment of a temporary resolution authority to identify undercapitalised banks and to restructure them, and longer-term measures, including the creation of permanent authorities for supervision, resolution and deposit insurance.
2012-08
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/36282/1/The_challenges_of_Europe's_fourfold_union_(English)_(English).pdf
http://www.bruegel.org/publications/publication-detail/publication/741-the-challenges-of-europes-fourfold-union/
Véron, Nicolas. (2012) The challenges of Europe's fourfold union. Bruegel Policy Contribution 2012/13, 16 August 2012. [Policy Paper]
http://aei.pitt.edu/36282/
oai:aei.pitt.edu:39060
2014-04-08T14:29:06Z
7374617475733D707562
7375626A656374733D46:46303233
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
7375626A656374733D46:46303038
7375626A656374733D46:46303138
7375626A656374733D46:46303130
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
Options for a Euro-area fiscal capacity. Bruegel Policy Brief 2013/01, January 2013
Pisani-Ferry, Jean
Vihriälä , Erkki
Wolff, Guntram B.
Greece
Ireland
Portugal
Spain
EMU/EMS/euro
fiscal policy
Europe has responded to the crisis with strengthened budgetary and macroeconomic surveillance, the creation of the European Stability Mechanism, liquidity provisioning by resilient economies and the European Central Bank and a process towards a banking union. However, a monetary union requires some form of budget for fiscal stabilisation in case of shocks, and as a backstop to the banking union.
This paper compares four quantitatively different schemes of fiscal stabilisation and proposes a new scheme based on GDP-indexed bonds. The options considered are: (i) A federal budget with unemployment and corporate taxes shifted to euro-area level; (ii) a support scheme based on deviations from potential output;(iii) an insurance scheme via which governments would issue bonds indexed to GDP, and (iv) a scheme in which access to jointly guaranteed borrowing is combined with gradual withdrawal of fiscal sovereignty.
Our comparison is based on strong assumptions. We carry out a preliminary, limited simulation of how the debt-to-GDP ratio would have developed between 2008-14 under the four schemes for Greece, Ireland, Portugal, Spain and an ‘average’ country.The schemes have varying implications in each case for debt sustainability
2013-01
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/39060/1/Options_for_a_Euro%2DArea_fiscal_capacity_(English).pdf
http://www.bruegel.org/publications/publication-detail/publication/765-options-for-a-euro-area-fiscal-capacity/
Pisani-Ferry, Jean and Vihriälä , Erkki and Wolff, Guntram B. (2013) Options for a Euro-area fiscal capacity. Bruegel Policy Brief 2013/01, January 2013. [Policy Paper]
http://aei.pitt.edu/39060/
oai:aei.pitt.edu:40235
2014-07-25T13:37:49Z
oai:aei.pitt.edu:43182
2013-08-20T18:23:39Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
Sovereign debt and its restructuring framework in the Euro area. Bruegel Working Paper 2013/05, August 2013
Mody, Ashoka
fiscal policy
financial crisis 2008-on/reforms/economic governance
To compensate for the inflexibility of fixed exchange rates, the euro area needs flexibility through a system of orderly debt restructuring. With virtually no room for macroeconomic manoeuvring since the crisis onset, fiscal austerity has been the main instrument for achieving reductions in public debt levels; but because austerity also weakens growth, public debt ratios have barely budged. Austerity has also implied continued high private debt ratios. And these debt burdens have perpetuated economic stasis. Economic theory,history, and the recent experience all call for a principled debt restructuring mechanism as an integral element of the euro area’s design. Sovereign debt should be recognised as equity (a residual claim on the sovereign), operationalised by the automatic lowering of the debt burden upon the breach of contractually-specified thresholds. Making debt more equity-like is also the way forward for speedy private deleveraging. This debt-equity swap principle is a needed shock absorber for the future but will also serve as the principle to deal with the overhang of ‘legacy’ debt.
2013-08
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/43182/1/Sovereign_debt_and_its_restructuring_framework_in_the_euro_area_(English).pdf
http://www.bruegel.org/publications/publication-detail/publication/788-sovereign-debt-and-its-restructuring-framework-in-the-euro-area/
Mody, Ashoka (2013) Sovereign debt and its restructuring framework in the Euro area. Bruegel Working Paper 2013/05, August 2013. [Working Paper]
http://aei.pitt.edu/43182/
oai:aei.pitt.edu:43184
2013-08-20T17:56:01Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153746162696C69747947726F77746850616374
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666165636F6E6F6D6963706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
Economic Policy Coordination in the Economic and Monetary Union: From Maastricht via the SGP to the Fiscal Pact. CEPS Working Document No. 381, August 2013
Mortensen, Jørgen
Stability and Growth Pact
economic policy
fiscal policy
This paper first takes a step backwards with an attempt to situate the recent adoption of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union in the context of discussions on the Stability and Growth Pact (SGP) and the ‘Maastricht criteria’, as fixed in the Maastricht Treaty for membership in the Economic and Monetary Union (EMU) in a longer perspective of the sharing of competences for macroeconomic policy-making within the EU. It then presents the main features of the new so-called ‘Fiscal Compact’ and its relationship to the SGP and draws some conclusions as regards the importance and relevance of this new step in the process of economic policy coordination. It concludes that the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union does not seem to offer a definitive solution to the problem of finding the appropriate budgetary-monetary policy mix in EMU, which was already well identified in the Delors report in 1989 and regularly emphasised ever since and is now seriously aggravated due to the crisis in the eurozone. Furthermore, implementation of this Treaty may under certain circumstances contribute to an increase in the uncertainties as regards the distribution of the competences between the European Parliament and national parliaments and between the former and the Commission and the Council.
2013-08
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/43184/1/WD381_JM_Economic_Policy_Coordination.pdf
http://www.ceps.be/book/economic-policy-coordination-economic-and-monetary-union-maastricht-sgp-fiscal-pact
Mortensen, Jørgen (2013) Economic Policy Coordination in the Economic and Monetary Union: From Maastricht via the SGP to the Fiscal Pact. CEPS Working Document No. 381, August 2013. [Working Paper]
http://aei.pitt.edu/43184/
oai:aei.pitt.edu:44221
2013-09-24T13:57:11Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666153696E676C654D61726B6574:65666153696E676C654D61726B65746361706974616C676F6F64737365727669636573
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
Fiscal policy, banks and the financial crisis. National Bank of Belgium Working Paper No. 234, October 2012
Kollmann, R.
Ratto, M.
Roeger, W.
in't Veld, J.
capital, goods, services, workers
fiscal policy
financial crisis 2008-on/reforms/economic governance
This paper studies the effectiveness of Euro Area (EA) fiscal policy, during the recent
financial crisis, using an estimated New Keynesian model with a bank. A key dimension of
policy in the crisis was massive government support for banks—that dimension has so far
received little attention in the macroeconomics literature. We use the estimated model to
analyze the effects of bank asset losses, of government support for banks, and other fiscal
stimulus measures, in the EA. Our results suggest that support for banks had a stabilizing
effect on EA output, consumption and investment. Increased government purchases helped to
stabilize output, but crowded out consumption. Higher transfers to households had a positive
impact on private consumption, but a negligible effect on output and investment. Banking
shocks and increased government spending explain half of the rise in the public debt/GDP
ratio since the onset of the crisis.
2012-10
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/44221/1/WP234En.pdf
http://www.nbb.be/doc/ts/publications/wp/WP234En.pdf
Kollmann, R. and Ratto, M. and Roeger, W. and in't Veld, J. (2012) Fiscal policy, banks and the financial crisis. National Bank of Belgium Working Paper No. 234, October 2012. [Working Paper]
http://aei.pitt.edu/44221/
oai:aei.pitt.edu:47674
2014-03-20T15:09:12Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6566616D6F6E6574617279706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
7375626A656374733D44:44303032:44303032303037
74797065733D626F6F6B
Macroeconomic and Financial Crisis Management in the Southern and Eastern Mediterranean: Diagnosis and Prospects. CEPS Paperbacks. December 2013
Arbak, Emrah
Bakardzhieva, Damyana
De Groen, Willem Pieter
Kamar, Bassem
Mouley, Sami
EU-Mediterranean/Union for the Mediterranean
fiscal policy
monetary policy
financial crisis 2008-on/reforms/economic governance
The global financial crisis, which started in the summer of 2007 and deepened in the aftermath of the Lehman failure in September 2008, has led to a virtual collapse in economic activity and increased financial volatility worldwide. For the developing countries, the main channel of transmission has been a drop in external transactions, such as trade, financial and capital flows, and remittances. The emerging economies in the southern and eastern Mediterranean have also faced declining economic activity, although there seems to be considerable variation in the relative magnitude and timing. Most of these economies have shown a delayed but more lasting response to the crisis, driven mostly by their close trade and investment ties with the EU and the Gulf Cooperation Council (GCC) countries. This book explores the fiscal, monetary and financial effects of the crisis in the region and provides an in-depth analysis of the fiscal, monetary and banking policies in the post-crisis era, the viability of their exit strategies and the future of reforms in the region. These analyses not only provide a comprehensive comparison between the countries but also provide a solid basis for assessing future economic and financial developments and reforms in the region.
Ayadi, Rym
2013
Book
NonPeerReviewed
application/pdf
http://aei.pitt.edu/47674/1/Macro_%26_Fin_Crisis_Mgt_in_SEMCs.pdf
http://www.ceps.be/book/macroeconomic-and-financial-crisis-management-southern-and-eastern-mediterranean-diagnosis-and
Arbak, Emrah and Bakardzhieva, Damyana and De Groen, Willem Pieter and Kamar, Bassem and Mouley, Sami (2013) Macroeconomic and Financial Crisis Management in the Southern and Eastern Mediterranean: Diagnosis and Prospects. CEPS Paperbacks. December 2013. Series > Centre for European Policy Studies (Brussels) > CEPS Paperbacks <http://aei.pitt.edu/view/series/SMCEPSPaperbacks.html> . UNSPECIFIED. ISBN 978-94-6138-365-5
http://aei.pitt.edu/47674/
oai:aei.pitt.edu:52092
2019-11-17T19:14:18Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D70726F63656564696E6773
When is debt a menace? The economic and political aspects of debt sustainability
Barta, Zsófia
fiscal policy
Just when it seemed like sovereign default was a virtual impossibility in the developed world, the turmoil in sovereign debt markets triggered by explosive debt growth in the wake of the financial crisis raised new fears about fiscal prospects in many advanced economies. However, assessing the severity of the situation is complicated by the fact that no definitive empirical or theoretical benchmark exists for sovereign solvency. This paper reviews the literature on solvency, sustainability and default as well as recent expert contributions about the severity of the present fiscal situation in the developed world and finds that the difficulties involved in determining the dangers entailed in outstanding debt include not only the need to deal with economic uncertainty surrounding the ability of the given sovereign to pay, but also-and the paper argues in the case of developed countries more importantly-gauging the political context determining the willingness of the sovereign to service debt. It then goes on to explore the ways in which markets gauge this degree of willingness, using rating agencies' sovereign rating methodologies as a proxy for markets' approach to creditworthiness and quoting examples of ratings changes in the recent past to see what degree the considerations listed in the rating methodologies are applied in practice. It concludes that increased nervousness about sovereign default might lead to a more intrusive influence by market actors on a broader range of policy and institutional issues in developed countries than before.
2011
Conference Proceedings
NonPeerReviewed
application/pdf
http://aei.pitt.edu/52092/1/BARTA.pdf
Barta, Zsófia (2011) When is debt a menace? The economic and political aspects of debt sustainability. [Conference Proceedings]
http://aei.pitt.edu/52092/
oai:aei.pitt.edu:52709
2014-07-17T13:33:36Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
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7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
Did the German court do Europe a favor? Bruegel Working Paper 2014/09, July 2014
Mody, Ashoka
fiscal policy
monetary policy
financial crisis 2008-on/reforms/economic governance
The European Central Bank’s Outright Monetary Transactions (OMT) programme was a politically-pragmatic tool to diffuse the euro-area crisis. But it did not deal with the fundamental incompleteness of the European monetary union. As such, it blurred the boundary between monetary and fiscal policy. The fuzziness of this boundary helped in the short-term but pushed political and economic risks to the future. Unless a credible commitment to enforcing losses on private creditors is instituted, these conundrums will persist. The German Federal Constitutional Court has helped by insisting that such a dialogue be conducted in order to achieve a more durable political and economic solution. A study of the European Union Court of Justice’s Pringle decision (Thomas Pringle v Government of Ireland, Ireland and The Attorney General, Case C-370/12, ECJ, 27 November 2012) suggests that the ECJ will also not rubber-stamp the OMT – and, if it does, the legal victory will not resolve the fundamental dilemmas.
2014-07
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/52709/1/Did_the_German_court_do_Europe_a_favour%2D_(English).pdf
http://www.bruegel.org/publications/publication-detail/publication/840-did-the-german-court-do-europe-a-favour/
Mody, Ashoka (2014) Did the German court do Europe a favor? Bruegel Working Paper 2014/09, July 2014. [Working Paper]
http://aei.pitt.edu/52709/
oai:aei.pitt.edu:57194
2014-11-07T14:07:58Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
The case of the disappearing Fiscal Compact. CEPS Commentary, 5 November 2014
Gros, Daniel.
Alcidi, Cinzia.
fiscal policy
Following the Commission’s autumn forecast showing that only five euro-area countries exhibit a fiscal balance better than the 0.5% of GDP deficit allowed by the Fiscal Compact, Daniel Gros and Cinzia Alcidi attempt to explain in this new Commentary why there is precious little policy debate over these flagrant treaty violations. They find that it is not possible to put fiscal policy in a legal straightjacket and that the tight rules enshrined in the new Treaty and in national constitutions are discarded as soon as they become politically inconvenient.
2014-11
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/57194/1/Fiscal_Compact.pdf
http://www.ceps.eu/node/9789
Gros, Daniel. and Alcidi, Cinzia. (2014) The case of the disappearing Fiscal Compact. CEPS Commentary, 5 November 2014. [Policy Paper]
http://aei.pitt.edu/57194/
oai:aei.pitt.edu:58359
2014-12-12T19:47:18Z
7374617475733D707562
7375626A656374733D46:46303037
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
The fiscal compact - Europe's "hard core" based on German economic conditions. OSW Commentary No. 71, 2012-03-07
Poplawski, Konrad
Germany
fiscal policy
On 2 March, the leaders of 25 EU member states signed the Treaty on stability, coordination and governance in the economic and monetary union.
It will introduce new fiscal constraints and officially vest new competences in the eurozone countries. Thus, their right to coordinate economic policy among them will be sanctioned. So far, the Lisbon Treaty has only provided for organisation of informal Eurogroup meetings, to be attended by representatives of the European Commission. The principles introduced by the compact, if the eurozone countries are really determined to observe its provisions, will create a new way of managing the single currency. Within the next few years, the most indebted countries will have to carry out radical reforms to boost their competitiveness and adjust it to German standards. During this period the Federal Republic of Germany will most probably decide to offer higher loan guarantees to relieve these countries’ budgets. The compact’s political consequences are also of great significance, especially considering how the treaty was finalised. The eurozone states have in fact accepted that the direction for changes will be devised by France and Germany, and the role of European institutions such as the Commission or the Parliament may weaken. From the perspective of eurozone candidate countries, the introduction of the fiscal compact means expanding the scope of conditions they must meet to become members of the single currency area. In the future, a country, in order to adopt the single currency, will have to meet the structural deficit criterion, and also most probably carry out economic reforms such as unifying its fiscal system. These goals will be achieved across the eurozone gradually, in the subsequent stages of the economic governance reform.
2012-03
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/58359/1/commentary_71.pdf
http://www.osw.waw.pl/en/publikacje/osw-commentary/2012-03-07/fiscal-compact-europes-hard-core-based-german-economic
Poplawski, Konrad (2012) The fiscal compact - Europe's "hard core" based on German economic conditions. OSW Commentary No. 71, 2012-03-07. [Policy Paper]
http://aei.pitt.edu/58359/
oai:aei.pitt.edu:58403
2015-04-02T15:44:25Z
7374617475733D707562
7375626A656374733D44:44303031:706F6C69746963616C6166666169727331323334:70616666676F7665726E616E6365:70616666676F7665726E616E63657375626E6174696F6E616C726567696F6E616C2F7465727269746F7269616C
7375626A656374733D46:46303236
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
Is Independence Possible in an Interdependent World? Scotland vs. the UK's Participation in the European Economy. Bruges European Economic Policy (BEEP) Briefing 30/2013
Hughes Hallet, Andrew
U.K.
fiscal policy
subnational/regional/territorial
Many commentators have criticised the strategy used to finance regional governments such as the Scottish Parliament – both the block grant system and the limited amount of fiscal autonomy devised in the Scotland Act of 2012. This lecture sets out to identify what level of autonomy or independence would best suit a regional economy in a currency union, and also the institutional changes needed to sustain those arrangements. Our argument is developed along three lines. First, we set out the advantages of a fiscal federalism framework and the institutions needed to support it, but which the Euro-zone currently lacks. The second is to elaborate a model of fiscal federalism where comprehensive powers of taxation and spending are devolved (an independent Scotland and the UK remain constituent members of the EU and European economy). Third, we evaluate the main arguments for the breakup of nations or economic unions with Scotland and the UK as leading examples.
We note that greater autonomy may not result in increases in long run economic growth rate, but it does imply that enhancing the fiscal competence and responsibility of regional governments would result in productivity gains and hence higher levels of GDP per head. That means the population is permanently richer than before, even if ultimately their incomes continue to grow at the same rate. It turns out that these improvements can be achieved through devolved tax powers, but not through devolved spending powers or shared taxes.
2013-10
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/58403/1/beep_30.pdf
Hughes Hallet, Andrew (2013) Is Independence Possible in an Interdependent World? Scotland vs. the UK's Participation in the European Economy. Bruges European Economic Policy (BEEP) Briefing 30/2013. [Policy Paper]
http://aei.pitt.edu/58403/
oai:aei.pitt.edu:58443
2014-12-22T15:11:48Z
7374617475733D707562
7375626A656374733D44:44303031:706F6C69746963616C6166666169727331323334:70616666676F7665726E616E6365
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666165636F6E6F6D6963706F6C696379
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
Testing for Subsidiarity. Bruges European Economic Policy (BEEP) Briefing 13/2006
Pelkmans, Jacques
economic policy
fiscal policy
governance: EU & national level
In the EU circuit (especially the European Parliament, the Council and Coreper) as well as in
national parliaments of the EU Member States, one observes a powerful tendency to regard
'subsidiarity' as a 'political' issue. Moreover, subsidiarity is frequently seen as a one-way
street : powers going 'back to' Member States. Both interpretations are at least partly flawed
and less than helpful when looking for practical ways to deal with subsidiarity at both EU and
Member states' levels.
The present paper shows that subsidiarity as a principle is profoundly 'functional' in nature
and, hence, is and must be a two-way principle. A functional subsidiarity test is developed
and its application is illustrated for a range of policy issues in the internal market in its widest
sense, for equity and for macro-economic stabilisation questions in European integration.
Misapplications of 'subsidiarity' are also demonstrated.
For a good understanding, subsidiarity being a functional, two-way principle neither means
that elected politicians should not have the final (political!) say (for which they are
accountable), nor that subsidiarity tests, even if properly conducted, cannot and will not be
politicised once the results enter the policy debate. Such politicisation forms a natural run-up
to the decision-making by those elected for it. But the quality and reasoning of the test as well
as structuring the information in a logical sequence ( in accordance with the current protocol
and with the one in the constitutional treaty) is likely to be directly helpful for decisionmakers,
confronted with complicated and often specialised proposals. EU debates and
decision-making is therefore best served by separating the functional subsidiarity test
(prepared by independent professionals) from the final political decision itself. If the test were
accepted Union-wide, it would also assist national parliaments in conducting comparable tests
in a relatively short period, as the basis for possible joint action (as suggested by the
constitutional treaty).
The core of the paper explains how the test is formulated and applied. A functional approach
to subsidiarity in the framework of European representative democracy seeks to find the
optimal assignment of regulatory or policy competences to the various tiers of government. In
the final analysis, this is about structures facilitating the highest possible welfare in the Union,
in the fundamental sense that preferences and needs are best satisfied. What is required for
such an analysis is no less than a systematic cost/benefit framework to assess the (de)merits of
(de)centralisation in the EU.
2006-02
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/58443/1/beep13.pdf
Pelkmans, Jacques (2006) Testing for Subsidiarity. Bruges European Economic Policy (BEEP) Briefing 13/2006. [Policy Paper]
http://aei.pitt.edu/58443/
oai:aei.pitt.edu:58453
2014-12-22T16:10:32Z
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7375626A656374733D44:44303031:44303031303435
7375626A656374733D44:44303031:44303031303332
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
Towards a New (European Research) Deal: The Case for Enhanced Fiscal Policy Coordination on Research and Innovation. Bruges European Economic Policy (BEEP) Briefing 20/2008
di Pietrantonio, Loris
rtd (RTD) policy/European Research Area
innovation policy
fiscal policy
The paper reviews the evolution of research and innovation in the EU and assesses how current policies and programmes have influenced the development of Europe's research landscape. Based on existing literature, evaluation reports and practice, the paper critically examines the effectiveness of current European research funding instruments in a context of open innovation and in the presence of global spillovers. It therefore develops a subsidiarity test to assess whether current rationales still prove sufficient to justify policy intervention in this area.
The paper sheds light on how to improve the effectiveness of EU action by enriching it by the use of coordinated fiscal policy for research funding. This will constitute an incentive to genuine bottom-up research, development and innovation (R&D&I) and a stimulus to local investments in innovation. The paper also assesses the potentials of a reinforced open method of coordination as well as a review of state aid law in the field of research funding in the EU.
2008-07
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/58453/1/beep20.pdf
di Pietrantonio, Loris (2008) Towards a New (European Research) Deal: The Case for Enhanced Fiscal Policy Coordination on Research and Innovation. Bruges European Economic Policy (BEEP) Briefing 20/2008. [Policy Paper]
http://aei.pitt.edu/58453/
oai:aei.pitt.edu:58456
2014-12-22T16:24:38Z
7374617475733D707562
7375626A656374733D46:46303038
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
Why Is Sovereign Debt Restructuring a Challenge? The Case of Greece. Bruges European Economic Policy (BEEP) Briefing 24/2012
Dreger, Joanna
Greece
fiscal policy
The reduction of Greek sovereign debt by €106 billion, agreed in the second bailout package of February 2012, is the largest in history. Nevertheless, immediately after publishing the key terms of the package, doubts arose whether it would achieve its goals: to reduce the debt-to-GDP ratio to 120.5% in 2020 and to ensure the return of Greece to market financing by 2015.
This Briefing gives a timely input to the debate as it develops an analytical framework through which the expected failure of the Greek debt reduction can be assessed. It surveys the economic literature to identify three groups of factors reducing the effectiveness of sovereign debt restructuring: (1) sovereign’s fundamentals, (2) inefficiencies inherent in the restructuring process and (3) costs of restructuring; and applies them to the case of Greece.
Based on this analysis, three policy implications are formulated, with relevance to Greece and the wider eurozone. Firstly, the importance of increased policy effort by Greece to enact current structural and growth-enhancing reforms is underlined. Secondly, the introduction of uniform CACs is proposed that will reduce the market participants’ uncertainty, discipline the runs on government debt and address the holdout inefficiency. Finally, sovereign debt restructuring is not recommended as a universal solution for over- indebtedness in the EU, given the direct and reputation costs of sovereign debt restructuring and the self-fulfilling nature of sovereign debt crises.
2012-11
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/58456/1/beep24.pdf
Dreger, Joanna (2012) Why Is Sovereign Debt Restructuring a Challenge? The Case of Greece. Bruges European Economic Policy (BEEP) Briefing 24/2012. [Policy Paper]
http://aei.pitt.edu/58456/
oai:aei.pitt.edu:58552
2014-12-18T18:09:01Z
7374617475733D707562
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74797065733D706F6C6963797061706572
The 2005 Reform of the Stability and Growth Pact: Too Little, Too Late? Bruges European Economic Research (BEER) Papers 6/November 2006
Kostoris, Fiorella
Schioppa, Padoa
EMU/EMS/euro
Stability and Growth Pact
fiscal policy
This paper analyses the main critiques addressed by the literature and the policymakers
to the 1997 Stability and Growth Pact. It further indicates to what extent the
2005 reform of the Pact meets those critics. It finally argues that the 2005 reform may
be too little and arrive too late to restore the Pact credibility, ensure its enforceability
and correctly set the derogations to the excessive deficit procedure on the nature of
the shocks which cause the output gap rather than its size: a 3% of GDP limit on
deficit spending may be a too binding constraint in front of a strongly negative
demand shock, while it is irrationally large in front of a supply shock. Some empirical
evidence is provided to identify in the last years strongly negative demand shocks
from other shocks in the 25 EU Member States. Had this identifying method been
adopted in November 2003, the European Commission and the Council would have
both agreed to stop the excessive deficit procedure against Germany, but they would
have both proceeded against France which apparently was not at the time hit by a
strongly negative demand shock.
2006-11
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/58552/1/beer15_(7).pdf
Kostoris, Fiorella and Schioppa, Padoa (2006) The 2005 Reform of the Stability and Growth Pact: Too Little, Too Late? Bruges European Economic Research (BEER) Papers 6/November 2006. [Policy Paper]
http://aei.pitt.edu/58552/
oai:aei.pitt.edu:58631
2014-12-19T16:56:18Z
7374617475733D707562
7375626A656374733D44:44303031:44303031303337
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
7375626A656374733D46:46303131
74797065733D706F6C6963797061706572
A Microsimulation of the Impact of Tax Reforms on Child Poverty: the Case of Italy. Bruges European Economic Research (BEER) Papers 29/February 2014
Sandu, Roxana
tax policy
Italy
fiscal policy
Microsimulation models have been used in order to find efficient counteractive instruments to poverty. The objective of this paper is to analyse the impact of fiscal policy on poverty, insisting on child poverty rates. Empirical analysis suggests that in fighting poverty, a mix of policies need to be in place, fiscal reforms increasing tax allowances such as child benefit granted to parents with dependent children, are not sufficient to reduce child poverty.
2014-02
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/58631/1/beer15_(29).pdf
Sandu, Roxana (2014) A Microsimulation of the Impact of Tax Reforms on Child Poverty: the Case of Italy. Bruges European Economic Research (BEER) Papers 29/February 2014. [Policy Paper]
http://aei.pitt.edu/58631/
oai:aei.pitt.edu:59154
2015-01-12T18:46:24Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D6F74686572
Focal points and fiscal discipline. ACES Cases No. 2013.2
Kelemen, R. Daniel
Teo, Terence K.
fiscal policy
financial crisis 2008-on/reforms/economic governance
Many studies suggest that balanced budget rules can restrain sovereign debt and lower sovereign borrowing costs, even if those rules are never enforced in court. Typically, this is explained as a result of a legal deterrence logic, in which the threat of judicial enforcement deters sovereigns from violating the rules. By contrast, we argue that balanced budget rules work by coordinating decentralized punishment of sovereigns by bond markets, rather than by posing a credible threat of judicial enforcement. Therefore, the clarity of the focal point provided by the rule, rather than the strength of its judicial enforcement mechanisms, determines its effectiveness. We develop a formal model that captures the logic of our argument, and we assess this model using data on US states. We then consider implications of our argument for the impact of the balanced budget rules recently imposed on eurozone states in the Fiscal Compact Treaty.
Silvia, Stephen J.
2013
Other
NonPeerReviewed
application/pdf
http://aei.pitt.edu/59154/1/ACES_Case_Kelemen_and_Teo_2013.pdf
http://transatlantic.sais-jhu.edu/ACES/ACES_Cases/cases
Kelemen, R. Daniel and Teo, Terence K. (2013) Focal points and fiscal discipline. ACES Cases No. 2013.2. UNSPECIFIED.
http://aei.pitt.edu/59154/
oai:aei.pitt.edu:63428
2015-04-07T00:19:14Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:6663723230303839
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74797065733D776F726B696E677061706572
Effectiveness and transmission of the ECB’s balance sheet policies. National Bank of Belgium Working Paper No. 275, December 2014
Boeckx, Jef
Dossche, Maarten
Peersman, Gert
fiscal policy
financial crisis 2008-on/reforms/economic governance
We estimate the effects of exogenous innovations to the balance sheet of the ECB since the start of
the financial crisis within a structural VAR framework. An expansionary balance sheet shock
stimulates bank lending, stabilizes financial markets, and has a positive impact on economic activity
and prices. The effects on bank lending and output turn out to be smaller in the member countries
that have been more affected by the financial crisis, in particular those countries where the banking
system is less well-capitalized.
2014-12
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/63428/1/WP275En.pdf
http://www.nbb.be/pub/06_00_00_00_00/06_03_00_00_00/06_03_05_00_00.htm?l=en
Boeckx, Jef and Dossche, Maarten and Peersman, Gert (2014) Effectiveness and transmission of the ECB’s balance sheet policies. National Bank of Belgium Working Paper No. 275, December 2014. [Working Paper]
http://aei.pitt.edu/63428/
oai:aei.pitt.edu:63429
2015-04-07T00:13:47Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
Comparing fiscal multipliers across models and countries in Europe. National Bank of Belgium Working Paper No. 278, March 2015
Walque, Gregory de
Kilponen, Juha
Pisani, Massimiliano
Schmidt, Sebastian
Corbo, Vesna
Hledik, Tibor
Hollmayr, Josef
Hurtado, Samuel
Júlio, Paulo
Kulikov, Dmitry
Lemoine, Matthieu
Lozej, Matija
Lundvall, Henrik
Maria, José R.
Micallef, Brian
Papageorgiou, Dimitris
Rysanek, Jakub
Sideris, Dimitrios
Thomas, Carlos
fiscal policy
This paper employs fifteen dynamic macroeconomic models maintained within the European
System of Central Banks to assess the size of fiscal multipliers in European countries. Using a set
of common simulations, we consider transitory and permanent shocks to government expenditures
and different taxes. We investigate how the baseline multipliers change when monetary policy is
transitorily constrained by the zero nominal interest rate bound, certain crisis-related structural
features of the economy such as the share of liquidity-constrained households change, and the
endogenous fiscal rule that ensures fiscal sustainability in the long run is specified in terms of labour
income taxes instead of lump-sum taxes.
2015-03
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/63429/1/wp278en.pdf
http://www.nbb.be/pub/06_00_00_00_00/06_03_00_00_00/06_03_05_00_00.htm?l=en
Walque, Gregory de and Kilponen, Juha and Pisani, Massimiliano and Schmidt, Sebastian and Corbo, Vesna and Hledik, Tibor and Hollmayr, Josef and Hurtado, Samuel and Júlio, Paulo and Kulikov, Dmitry and Lemoine, Matthieu and Lozej, Matija and Lundvall, Henrik and Maria, José R. and Micallef, Brian and Papageorgiou, Dimitris and Rysanek, Jakub and Sideris, Dimitrios and Thomas, Carlos (2015) Comparing fiscal multipliers across models and countries in Europe. National Bank of Belgium Working Paper No. 278, March 2015. [Working Paper]
http://aei.pitt.edu/63429/
oai:aei.pitt.edu:63521
2015-04-23T16:26:02Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:656661454D55454D536575726F
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74797065733D706F6C6963797061706572
How EU Fiscal Norms Will Become a Safety Net for the Failure of National Golden Rules. European Policy Brief No. 6, January 2012
Verhelst, Stijn
EMU/EMS/euro
fiscal policy
If introduced successfully, national Golden Rules will completely overturn fiscal governance in the eurozone. Golden Rules would almost always be more stringent than EU-level fiscal norms. EU fiscal norms will hence evolve into a safety net in case a Golden Rule fails. The possibility of such a failure is, indeed, not to be dismissed. Because of the severity of the Golden Rules, eurozone leaders should reflect on their design. There is a real risk that they will undercut public investment, which would be at the cost of the EU’s other long-term challenges.
2012-01
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/63521/1/EPB6.pdf
http://www.egmontinstitute.be/publication_article/how-eu-fiscal-norms-will-become-a-safety-net-for-the-failure-of-national-golden-rules/
Verhelst, Stijn (2012) How EU Fiscal Norms Will Become a Safety Net for the Failure of National Golden Rules. European Policy Brief No. 6, January 2012. [Policy Paper]
http://aei.pitt.edu/63521/
oai:aei.pitt.edu:63537
2015-04-23T16:04:51Z
7374617475733D707562
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74797065733D706F6C6963797061706572
A case for adjusting fiscal consolidation in the eurozone. European Policy Brief No. 14, January 2013
Bosch, Xavier Vanden
EMU/EMS/euro
fiscal policy
Fiscal consolidation is essential to ensure the sustainability of eurozone countries’ public debt. However, as a principle, consolidation should not be pursued at a pace unnecessarily undermining growth in the short term. Repeated downward revisions of growth call for the use of the flexibility foreseen in the EU fiscal framework. The Commission should adapt the deadlines for fiscal correction to prevent excessive, pro-cyclical adjustment in 2013. In turn, adequate surveillance and coordination must ensure structural adjustments constitute the core of fiscal consolidation plans.
2013-01
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/63537/1/EPB14.pdf
http://www.egmontinstitute.be/publication_article/a-case-for-adjusting-fiscal-consolidation-in-the-eurozone/
Bosch, Xavier Vanden (2013) A case for adjusting fiscal consolidation in the eurozone. European Policy Brief No. 14, January 2013. [Policy Paper]
http://aei.pitt.edu/63537/
oai:aei.pitt.edu:63541
2015-04-30T00:36:34Z
7374617475733D707562
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74797065733D706F6C6963797061706572
Contractual arrangements: the overlooked step towards a fiscal union. European Policy Brief No. 18, December 2013
Bosch, Xavier Vanden
EMU/EMS/euro
fiscal policy
‘Contractual arrangements’ were proposed as an initial step towards a fiscal union that would consolidate the EMU. At this stage, the debate should be centred on the cornerstone of these contracts: the solidarity mechanism. The form of the financial support should not be limited to loans, and include the possibility for grants. Only the countries with the greatest adjustment needs should benefit from the financial support of other countries. This solidarity could be justified in principle by the intensity of the ‘shocks’ they experienced. In this way, contractual arrangement would facilitate the completion of the necessary adjustment in the current crisis – thanks both to more structural reforms and more mutual support within the eurozone.
2013-12
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/63541/1/EPB18.pdf
http://www.egmontinstitute.be/publication_article/contractual-arrangements-the-overlooked-step-towards-a-fiscal-union/
Bosch, Xavier Vanden (2013) Contractual arrangements: the overlooked step towards a fiscal union. European Policy Brief No. 18, December 2013. [Policy Paper]
http://aei.pitt.edu/63541/
oai:aei.pitt.edu:64203
2015-05-26T14:52:56Z
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7375626A656374733D44:44303035:44303035303039
74797065733D776F726B696E677061706572
The ‘Visible Hand’ of the ECB’s Quantitative Easing. CEPS Working Document No. 407/May 2015
Valiante, Diego.
European Central Bank
fiscal policy
Quantitative easing à la ECB has produced so far an impact on long-term nominal rates
through ex ante channels: signalling channels, term duration channels, and risk premia
channels. The term duration channel will also lead to a lengthening of the average maturity of
government debts, with possible implications for fiscal policy. The ECB’s determination to buy
government bonds in a fragmented market with a low net supply may also produce an ex post
impact, during the actual asset purchases, but less on nominal rates and more on financial
plumbing, as recent volatility suggests. As the effects of scarce supply in collateral markets are
felt, repo rates remain well below zero. Lower supply and limited re-usability of high quality
collateral, capped by regulatory requirements, is a constraint on market liquidity and
compresses dealers’ balance sheets. By keeping a depressed yield curve and asset prices high,
QE may also accelerate the consolidation of both traditional and capital-market based (dealer)
bank business models. What is less clear is how these changing business models will interact
with the sharp rise of the asset management industry in the aftermath of the crisis, which raises
questions about the implications for global collateral flows and deposit-like funding channels.
2015-05
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/64203/1/WD408_DV_QE.pdf
Valiante, Diego. (2015) The ‘Visible Hand’ of the ECB’s Quantitative Easing. CEPS Working Document No. 407/May 2015. [Working Paper]
http://aei.pitt.edu/64203/
oai:aei.pitt.edu:65788
2015-07-21T16:58:34Z
7374617475733D707562
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The Political Economy of Financial Crisis Policy. Bruegel Working Paper 2015/06, July 2015
O'Keeffe, Micheal
Tierzi, Alessio
fiscal policy
financial crisis 2008-on/reforms/economic governance
Highlights
• Government intervention to stabilise financial systems in times of
banking crises ultimately involves political decisions. This paper
sheds light on how certain political variables influence policy
choices during banking crises and hence have an impact on fiscal
outlays.
• We employ cross-country econometric evidence from all crisis
episodes in the period 1970-2011 to examine the impact political
and party systems have on the fiscal cost of financial sector
intervention.
• Governments in presidential systems are associated with lower fiscal
costs of crisis management because they are less likely to use
costly bank guarantees, thus reducing the exposure of the state to
significant contingent and direct fiscal liabilities. Consistent with
these findings we find further evidence that these governments are
less likely to use bank recapitalisation and more likely to impose
losses on depositors.
2015-07
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/65788/1/The_political_economy_or_financial_crisis_policy_(English).pdf
http://www.bruegel.org/publications/publication-detail/view/888/
O'Keeffe, Micheal and Tierzi, Alessio (2015) The Political Economy of Financial Crisis Policy. Bruegel Working Paper 2015/06, July 2015. [Working Paper]
http://aei.pitt.edu/65788/
oai:aei.pitt.edu:68361
2015-10-14T18:31:37Z
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74797065733D706F6C6963797061706572
spotlight europe #2015/04—October 2015: A Fiscal Union for Europe – Building Block and Not a Magic Bullet
Gnath, Katharina
Haas, Jörg
fiscal policy
financial crisis 2008-on/reforms/economic governance
The dramatic negotiations with Greece in the past few months have been a telling reminder of the weaknesses of the euro area. Most of the commentators are of the opinion that if the monetary union is going to be crisis-resistant and stable in the long term, certain very important elements will have to be changed. However, there is little or no agreement when it comes to specifying the "what" and the "how". In particular there are heated debates about the right steps to further integration in the area of fiscal policy. "Fiscal union can create stability only if it includes both credible budgetary rules and some kind of risk sharing", argue Katharina Gnath and Jörg Haas in the latest spotlight europe. However, "whilst it is an important and effective way of stabilizing the euro area, it should not exclude the use of other instruments."
2015-10
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/68361/1/spotlight_Fiscal_Union.pdf
http://www.bertelsmann-stiftung.de/en/publications/publication/did/a-fiscal-union-for-europe-building-block-and-not-a-magic-bullet/
Gnath, Katharina and Haas, Jörg (2015) spotlight europe #2015/04—October 2015: A Fiscal Union for Europe – Building Block and Not a Magic Bullet. [Policy Paper]
http://aei.pitt.edu/68361/
oai:aei.pitt.edu:72338
2016-02-18T14:43:27Z
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Which fiscal union for the euro area? Bruegel Policy Contribution ISSUE 2016/05, February 2016
Bénassy-Quéré, Agnès
Ragot, Xavier
Wolff, Guntram B.
fiscal policy
employment/unemployment
At the current level of political and societal integration, a large federal budget is unrealistic in the euro area. The authors make three recommendations that would lead national fiscal policies to be more stabilising with respect to the economic cycle, while achieving long-term sustainability. They also recommend a move towards a European unemployment insurance scheme targeted at ‘large’ shocks, and a minimum set of labour-market harmonisation criteria.
2016-02
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/72338/1/pc_2016_05.pdf
http://bruegel.org/2016/02/which-fiscal-union-for-the-euro-area/
Bénassy-Quéré, Agnès and Ragot, Xavier and Wolff, Guntram B. (2016) Which fiscal union for the euro area? Bruegel Policy Contribution ISSUE 2016/05, February 2016. [Policy Paper]
http://aei.pitt.edu/72338/
oai:aei.pitt.edu:73826
2016-03-29T13:55:35Z
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A proposal to revive the European Fiscal Framework. Bruegel Policy Contribution ISSUE 2016/07 MARCH 2016
Claeys, Grégory
Darvas, Zsolt
Leandro, Alvaro
fiscal policy
financial crisis 2008-on/reforms/economic governance
Pro-cyclical fiscal tightening might be one reason for the anaemic economic recovery
in Europe, raising questions about the effectiveness of the EU’s fiscal framework in
achieving its two main objectives: public debt sustainability and fiscal stabilisation.
• In theory, the current EU fiscal rules, with cyclically adjusted targets, flexibility
clauses and the option to enter an excessive deficit procedure, allow for large-scale
fiscal stabilisation during a recession. However, implementation of the rules is
hindered by the badly-measured structural balance indicator and incorrect forecasts,
leading to erroneous policy recommendations. The large number of flexibility clauses
makes the system opaque.
• The current inefficient European fiscal framework should be replaced with a system
based on rules that are more conducive to the two objectives, more transparent,
easier to implement and which have a higher potential to be complied with.
• The best option, re-designing the fiscal framework from scratch, is currently
unrealistic. Therefore we propose to eliminate the structural balance rules and to
introduce a new public expenditure rule with debt-correction feedback, embodied
in a multi-annual framework, which would also support the central bank’s inflation
target. A European Fiscal Council could oversee the system.
2016-03
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/73826/1/pc_2016_07.pdf
http://bruegel.org/2016/03/a-proposal-to-revive-the-european-fiscal-framework/
Claeys, Grégory and Darvas, Zsolt and Leandro, Alvaro (2016) A proposal to revive the European Fiscal Framework. Bruegel Policy Contribution ISSUE 2016/07 MARCH 2016. [Policy Paper]
http://aei.pitt.edu/73826/
oai:aei.pitt.edu:74090
2019-10-25T16:30:34Z
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Fiscal devaluation – a route to more growth? Bertelsmann Impulse #2015/04
Petersen, Thieß
economic growth
fiscal policy
The global economy faces a number of economic challenges: Economic growth in most industrialized nations is slowing, the crisis-hit countries of Southern Europe are suffering the effects of low competiveness and, even in some G7 countries, sovereign debt has reached levels in excess of 100 percent of gross domestic product (GDP) (see figure 1). As domestic demand is weak, many industrialized nations are banking on increasing their exports in order to boost domestic production and employment. However, this is resulting in large current account imbalances worldwide.
2015
Other
NonPeerReviewed
application/pdf
http://aei.pitt.edu/74090/1/Fiscal_devaluation.pdf
Petersen, Thieß (2015) Fiscal devaluation – a route to more growth? Bertelsmann Impulse #2015/04. UNSPECIFIED.
http://aei.pitt.edu/74090/
oai:aei.pitt.edu:78866
2017-05-23T22:00:46Z
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74797065733D70726F63656564696E6773
Mañana:
The
societal
origins
of
delayed
fiscal
adjustment
Barta, Zsófia
Ireland
Italy
fiscal policy
Heavily
indebted
and
in
the
throes
of
drastic
austerity
programmes,
Italy
and
Ireland
find
themselves
much
in
the
same
situation
as
a
quarter
of
a
century
ago.
In
the
second
half
of
the
1980s
and
the
early
1990s,
the
two
countries
carried
out
successful
fiscal
and
economic
stabilization
programmes
that
elicited
intense
attention
from
scholars
of
economic
adjustment.
The
recurrence
of
the
two
countries’
troubles
provides
an
exceptional
opportunity
to
put
theories
of
economic
adjustment
to
test.
Comparative
analyses
of
the
earlier
instances
of
stabilization
concentrated
on
the
similarities
between
the
two
cases
and
converged
on
emphasizing
the
importance
of
social
pacts
in
allowing
successful
reform.
In
contrast,
this
paper
shows
that
already
a
quarter
century
ago,
the
two
countries
followed
very
different
trajectories
to
stabilization
despite
the
institutional
similarities
of
the
solutions
they
adopted.
It
argues
that
fundamental
differences
in
the
two
countries’
societal
structure
–
more
specifically,
differences
in
the
level
of
socio-economic
polarization
–
are
crucial
in
understanding
the
differences
in
the
two
countries’
ability
to
renegotiate
redistributive
arrangements
and
thus
to
carry
out
successful
adjustment
then
as
now.
2015
Conference Proceedings
NonPeerReviewed
application/pdf
http://aei.pitt.edu/78866/1/Barta.pdf
Barta, Zsófia (2015) Mañana: The societal origins of delayed fiscal adjustment. [Conference Proceedings] (Submitted)
http://aei.pitt.edu/78866/
oai:aei.pitt.edu:78996
2018-03-06T20:43:56Z
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Risk Sharing towards the European Fiscal Union
D'Imperio, Paolo
fiscal policy
This research estimates a two-country Dynamic Stochastic General Equilibrium Model (DSGE) for the euro
area Core and Periphery. The estimation is done with Bayesian techniques using eleven macroeconomic time
series. The model implements an automatic fiscal transfer mechanism, able to deal with idiosyncratic shocks
affecting the two economies. The mechanism is able to improve the aggregate welfare in the economy, by
reducing consumption variability and increasing cross-country risk sharing. Simulating the model with estimated
parameters, we reach the conclusion that an optimal fiscal sharing mechanism should absorb 70% of idiosyncratic
shocks when agents are credit constrained. The risk sharing mechanism under analysis is able to deal with EMU
cyclical heterogeneity and external imbalances. The implementation of a risk sharing system would lead to a
greater fiscal coordination, marking a first step towards greater fiscal integration in the euro area.
2015
Conference Proceedings
NonPeerReviewed
application/pdf
http://aei.pitt.edu/78996/1/D'Imperio.pdf
D'Imperio, Paolo (2015) Risk Sharing towards the European Fiscal Union. [Conference Proceedings] (Submitted)
http://aei.pitt.edu/78996/
oai:aei.pitt.edu:80019
2016-09-27T15:10:00Z
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74797065733D706F6C6963797061706572
What are the prerequisites for a euro-area fiscal capacity? Bruegel Policy Contribution Issue n˚14 | 2016
Demertzis, Maria
Wolff, Guntram B.
fiscal policy
In this Policy Contribution, Maria Demertzsis and Guntram B. Wolff discuss three progressive steps for strengthening the fiscal framework at the euro-area level. These lead to less interference in national fiscal policymaking thanks to a more credible no-bailout clause, increased risk sharing and different degrees of provision of euro-area-wide public goods and fiscal stabilisation.
2016-09
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/80019/1/PC%2D14%2D2016.pdf
http://bruegel.org/2016/09/what-are-the-prerequisites-for-a-euro-area-fiscal-capacity/
Demertzis, Maria and Wolff, Guntram B. (2016) What are the prerequisites for a euro-area fiscal capacity? Bruegel Policy Contribution Issue n˚14 | 2016. [Policy Paper]
http://aei.pitt.edu/80019/
oai:aei.pitt.edu:80155
2016-10-11T14:15:21Z
7374617475733D707562
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74797065733D6F74686572
Assessing the Euro Area’s Shock-Absorption Capacity Risk sharing, consumption smoothing and fiscal policy. CEPS Special Report No. 146 / September 2016
Alcidi, Cinzia.
Thirion, Gilles
EMU/EMS/euro
fiscal policy
this paper assesses both the state of play and the future capacity of the EMU to respond and
adapt to asymmetric shocks. The objective is to provide a basis upon which to gauge the
potential value added of a European Unemployment Benefits Scheme (EUBS), against the
background of the recent plans for the Banking Union, the Capital Markets Union and the
reform of the fiscal governance framework. We find that the capacity of the system to deal
with asymmetric shocks (and in principle reduce their occurrence) is likely to increase due to
these changes, but it will remain limited in the medium term and certainly lower than in the
US. We also argue that given the broad pro-cyclicality of fiscal policy, the idea that national
policies alone can deal alone with asymmetric shocks is not realistic. Lastly, we maintain that
an ex-ante fiscal insurance mechanism can provide some degree of income smoothing and is
likely to catalyse market insurance. Fiscal and market insurance can reduce the role of credit
and borrowing, which until now has been the main channel for shock absorption in the euro
area but also the least effective in times of crisis. We conclude that, from a macroeconomic
point of view, an EUBS is a useful tool to improve shock absorption capacity and is not
mutually exclusive with market risk sharing.
2016-09
Other
NonPeerReviewed
application/pdf
http://aei.pitt.edu/80155/1/SR146_EUBS_Assessing_the_euro_area%E2%80%99s_shock%2Dabsorption_capacity.pdf
https://www.ceps.eu/publications/assessing-euro-area%E2%80%99s-shock-absorption-capacity-risk-sharing-consumption-smoothing-and
Alcidi, Cinzia. and Thirion, Gilles (2016) Assessing the Euro Area’s Shock-Absorption Capacity Risk sharing, consumption smoothing and fiscal policy. CEPS Special Report No. 146 / September 2016. UNSPECIFIED.
http://aei.pitt.edu/80155/
oai:aei.pitt.edu:82981
2016-12-22T18:31:48Z
7374617475733D707562
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Measuring fiscal spillovers in EMU and beyond: A Global VAR approach. CEPS Working Paper No. 428 / December 2016
Belke, Ansgar
Osowski, Thomas
fiscal policy
This paper identifies and measures fiscal spillovers in the EU countries empirically using a
global vector autoregression (GVAR) model. Our aim is to look at the sign and the absolute
values of fiscal spillovers in a country-wise perspective and at the time profile (impulse
response) of the impacts of fiscal shocks. We find moderate spillover effects of fiscal policy
shocks originating in Germany and France. However, there is significant variation regarding
magnitude of the spillovers among destination countries and country clusters. Furthermore,
we find some evidence that spillovers generated by German or French fiscal spillovers are
stronger for EMU than non-EMU countries in Europe.
JEL codes: C50, E61, F15, F42, H60
Keywords: EMU versus “Rest of Europe”, fiscal policy coordination, fiscal spillovers,
GVAR analysis, regional shocks, impulse response analysis, trade weights
2016-12
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/82981/1/WD428_Fiscal_spillover.pdf
https://www.ceps.eu/publications/measuring-fiscal-spillovers-emu-and-beyond-global-var-approach
Belke, Ansgar and Osowski, Thomas (2016) Measuring fiscal spillovers in EMU and beyond: A Global VAR approach. CEPS Working Paper No. 428 / December 2016. [Working Paper]
http://aei.pitt.edu/82981/
oai:aei.pitt.edu:87768
2019-12-10T20:20:20Z
7374617475733D707562
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Fiscal Risk Sharing and Resilience to Shocks: Lessons for the euro area from the US. CEPS Working Document No 2017/07, May 2017
Alcidi, Cinzia.
Thirion, Gilles
fiscal policy
The classic argument for a euro area (EA) fiscal capacity revolves around the need to “dampen the
effects of asymmetric shocks”. According to authors who expound this conventional wisdom, the euro
area (EA) needs a common fiscal capacity along the lines of the ‘US federal fiscal system’ because it lacks
automatic stabilisers to deal with asynchronous output fluctuations. This paper provides empirical
evidence to indicate that the abovementioned view largely overstates the stabilising role of US federal
transfers to states. Despite the absence of a centralised EA stabiliser, the automatic stabilisers in the EA
bring about a larger degree of insurance against asymmetric shocks (about 20%) than that provided by
the US federal budget (11%). To some extent, this is attributable to the higher degree of market-based
risk sharing in the US and to the existence of other public institutions enhancing financial stability and
private risk sharing in the US. Yet we show that US federal fiscal policy appears to be primarily a stabiliser
of US-wide shocks, rather than idiosyncratic shocks.
2017-05
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/87768/1/No_2017_07_CA_and_GT_Fiscal_risk%2Dsharing_and_resilience_to_shocks.pdf
https://www.ceps.eu/publications/fiscal-risk-sharing-and-resilience-shocks-lessons-euro-area-us
Alcidi, Cinzia. and Thirion, Gilles (2017) Fiscal Risk Sharing and Resilience to Shocks: Lessons for the euro area from the US. CEPS Working Document No 2017/07, May 2017. [Policy Paper]
http://aei.pitt.edu/87768/
oai:aei.pitt.edu:87875
2018-12-13T19:16:57Z
7374617475733D707562
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7375626A656374733D46:46303130
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Fiscal Policy for Recovery. ESRI WP326, October 2009
Fitz Gerald, John
Ireland
fiscal policy
financial crisis 2008-on/reforms/economic governance
A year ago, when the full impact of the financial crisis hit Ireland, it took some time for economists to assess what was happening and what were the full implications of the disaster. Economic forecasts were changing daily and the huge uncertainty about what was actually developing made policy-making exceptionally difficult. However, over the course of the winter and early spring economists came to understand what was happening in Ireland and the outside world somewhat better. In May, with colleagues in the ESRI, we published a paper (Bergin et al., 2009) which considered the possible paths to recovery for the Irish economy. This analysis suggested that the Irish economy, while suffering major permanent damage as a consequence of the recession, would return to a period of quite rapid growth once the world economy itself entered the recovery phase. At the time of publishing the recovery in the world economy was only a gleam in the economists’ eye. However, over the last six months there have been increasing signs of a return, if not to business as usual in the world economy, at least to limited growth.
2009
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/87875/1/WP326.pdf
Fitz Gerald, John (2009) Fiscal Policy for Recovery. ESRI WP326, October 2009. [Working Paper]
http://aei.pitt.edu/87875/
oai:aei.pitt.edu:88056
2017-07-14T23:25:05Z
7374617475733D707562
7375626A656374733D46:46303130
7375626A656374733D44:44303031:44303031303139
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D706F6C6963797061706572
An Examination of Irish Currency Policy. ESRI Policy Series No. 18. October 1993
Honohan, Patrick
energy policy (Including international arena)
Ireland
fiscal policy
The signature of the Maastricht Treaty, which was intended to usher in currency stability by transforming the European Monetary System (EMS) into an Economic and Monetary Union (EMU) with a single currency, was instead followed within months by the worst currency crisis for two decades. Ireland was hit by the crisis as badly as any region in the Community and the whole experience had already brought the
issue of currency policy to centre stage when, at the end of July 1993, the EMS quite suddenly collapsed under pressure of a new wave of speculation directed mainly against the French franc. This paper reviews Ireland's experience in the EMS and asks whether any changes in currency policy are suggested by recent events. Increasing complacency about the stability of the system over the past five years led to realignment policy within the system becoming too rigid. Its last months highlighted the weaknesses of such a system from Ireland's point of view, including its vulnerability to speculation and the volatility which it entails for the Irish pound-sterling
exchange rate.
1993
Policy Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/88056/1/PRS18.pdf
Honohan, Patrick (1993) An Examination of Irish Currency Policy. ESRI Policy Series No. 18. October 1993. [Policy Paper]
http://aei.pitt.edu/88056/
oai:aei.pitt.edu:88115
2019-12-29T16:48:49Z
7374617475733D707562
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666167656E6572616C
7375626A656374733D46:46303130
7375626A656374733D44:44303031:65636F6E6F6D696366696E616E6369616C61666661697273:65666166697363616C706F6C696379
74797065733D776F726B696E677061706572
Assessing the Sustainable Nature of Housing-Related Taxation Receipts: The Case of Ireland. ESRI WP503. May 2015
Addison-Smyth, Diarmaid
McQuinn, Kieran
Ireland
fiscal policy
general
Even by international standards, Ireland’s fiscal position was particularly affected by the recent financial crisis. As budgetary surpluses quickly gave way to significant deficits post 2007, the deterioration in the Irish public finances culminated in an Excessive Deficit Procedure being launched in 2009 and entry into a formal EU/IMF assistance programme in late 2010. Much of this deterioration was caused by the sudden and sharp decline in the Irish housing market as property-related taxes dried up. In this paper we quantify the extent of housing related tax windfall gains and losses. We find that at various times over the past three decades, there have been instances where dis-equilibrium in the Irish housing market has had significant
implications for the associated taxation receipts. Examining taxation aggregates in this manner can be seen as an important complement to recent policy responses aimed at
improving fiscal governance.
2015
Working Paper
NonPeerReviewed
application/pdf
http://aei.pitt.edu/88115/1/WP503.pdf
Addison-Smyth, Diarmaid and McQuinn, Kieran (2015) Assessing the Sustainable Nature of Housing-Related Taxation Receipts: The Case of Ireland. ESRI WP503. May 2015. [Working Paper]
http://aei.pitt.edu/88115/metadataPrefix%3Doai_dc%26offset%3D88116%26set%3D7375626A656374733D44%253A44303031%253A65636F6E6F6D696366696E616E6369616C61666661697273%253A65666166697363616C706F6C696379