E-90
... in a low inflation equilibrium as in equation (4). Sargent and Wallace (1981) show that, under rational expectations, the high inflation equilibrium is stable and the low inflation equilibrium unstable. In other words, if the economy deviates from the low inflation equilibrium, it converges to the high ...
... in a low inflation equilibrium as in equation (4). Sargent and Wallace (1981) show that, under rational expectations, the high inflation equilibrium is stable and the low inflation equilibrium unstable. In other words, if the economy deviates from the low inflation equilibrium, it converges to the high ...
Macroeconomic Asymmetry and Imbalance in the Eurozone Abstract
... experience given not only the number of countries involved in the process but also the structural imbalances and development gaps between these countries. In fact, fully established monetary unions in market economies have always been made up of territorial entities within the same nation. This is i ...
... experience given not only the number of countries involved in the process but also the structural imbalances and development gaps between these countries. In fact, fully established monetary unions in market economies have always been made up of territorial entities within the same nation. This is i ...
Titel
... The D-mark and German unification: myth and reality An experience of life: „one mistake brings on the next“ No political union lax interpretation of the convergence criteria in 1998 (eleven countries) insufficient surveillance by the EU Commission from the start watering down of the Stab ...
... The D-mark and German unification: myth and reality An experience of life: „one mistake brings on the next“ No political union lax interpretation of the convergence criteria in 1998 (eleven countries) insufficient surveillance by the EU Commission from the start watering down of the Stab ...
A safer and more prosperous Economic and Monetary Union
... of the Economic and Monetary Union rarely lands the every Member State invest in competitiveness. The flexifront page — though it should. After all, how our EMU bility of labour markets is an important aspect of both functions influences the daily life of every citizen and re- increasing and retaini ...
... of the Economic and Monetary Union rarely lands the every Member State invest in competitiveness. The flexifront page — though it should. After all, how our EMU bility of labour markets is an important aspect of both functions influences the daily life of every citizen and re- increasing and retaini ...
A Post-Crisis Eurozone: Still an Attractive Offer for Central
... freedom to conduct their own policies in response to the economic crisis, and as these policies appear to have been more successful than those of the eurozone members, the eurozone’s new corset might even further discourage them from joining. Moreover, mandatory contributions to permanent rescue fun ...
... freedom to conduct their own policies in response to the economic crisis, and as these policies appear to have been more successful than those of the eurozone members, the eurozone’s new corset might even further discourage them from joining. Moreover, mandatory contributions to permanent rescue fun ...
Interaction between Fiscal and Monetary Policy in a Dynamic
... quarter in which the inflation target (or target interval) was pursued. Initial dates vary, with an interval of 1990:1 for New Zealand and 1995:1 for Spain, with a final analysis period in 2001 for all countries except Finland and Spain, due to the transition to the Euro. They compare these data for ...
... quarter in which the inflation target (or target interval) was pursued. Initial dates vary, with an interval of 1990:1 for New Zealand and 1995:1 for Spain, with a final analysis period in 2001 for all countries except Finland and Spain, due to the transition to the Euro. They compare these data for ...
This PDF is a selection from a published volume from... Bureau of Economic Research
... loss had to be paid and inflation came back down. This interpretation of history is consistent with what Tao Zha and I found in our 2006 empirical paper. As another example, one could argue that uncertainty about US fiscal policy grew sharply at the time of the Ford deficits. In the Bianchi-Melosi s ...
... loss had to be paid and inflation came back down. This interpretation of history is consistent with what Tao Zha and I found in our 2006 empirical paper. As another example, one could argue that uncertainty about US fiscal policy grew sharply at the time of the Ford deficits. In the Bianchi-Melosi s ...
Coming Home to Europe: Greece and the Euro
... future members of EMU have to pursue economic policies as if they already were EMU members. Thus, Greece was only able to fulfill the criterion of price stability because it gave up independent monetary goals and converged to a Bundesbank/ECB-style monetary policy. Thus, Greece has already given up ...
... future members of EMU have to pursue economic policies as if they already were EMU members. Thus, Greece was only able to fulfill the criterion of price stability because it gave up independent monetary goals and converged to a Bundesbank/ECB-style monetary policy. Thus, Greece has already given up ...
Document
... policy was more or less refused in Germany, due to the 3%-cap regulation. This led to sector saving surpluses for corporations and private households, and banks searched for borrowers abroad. This lending at low interest rates sparked asset price bubbles in PIIGS countries, with house price increas ...
... policy was more or less refused in Germany, due to the 3%-cap regulation. This led to sector saving surpluses for corporations and private households, and banks searched for borrowers abroad. This lending at low interest rates sparked asset price bubbles in PIIGS countries, with house price increas ...
Before EMU Starts: Economic Policy Stimulates Recovery
... be reduced quickly. Monetary policy will thus become more expansionary not only in these countries but also in Western Europe as a whole. It is not likely that the central banks in countries with relatively low interest rates will tighten their policy because such moves would be resisted in the ligh ...
... be reduced quickly. Monetary policy will thus become more expansionary not only in these countries but also in Western Europe as a whole. It is not likely that the central banks in countries with relatively low interest rates will tighten their policy because such moves would be resisted in the ligh ...
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... The lower blue line in Figure 1 is personal consumpthan without, it is still not statistically different from tion expenditures over the same period. Observe zero. These results are robust to changes in the samthat consumption shows no noticeable increase at ple period and specification. For example ...
... The lower blue line in Figure 1 is personal consumpthan without, it is still not statistically different from tion expenditures over the same period. Observe zero. These results are robust to changes in the samthat consumption shows no noticeable increase at ple period and specification. For example ...
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... was stressed. Finally, EMU critics argued that the lack of a single fiscal policy did not allow the necessary redistribution mechanism to work within the euro area in case real economic developments diverged strongly across member countries. Following on from the above, according to this critical vi ...
... was stressed. Finally, EMU critics argued that the lack of a single fiscal policy did not allow the necessary redistribution mechanism to work within the euro area in case real economic developments diverged strongly across member countries. Following on from the above, according to this critical vi ...
English - Europeanrights.eu
... Coordination and Governance in the Economic and Monetary Union (the ‘Fiscal Compact’) were concluded in an intergovernmental setting outside the Treaties; X. whereas the European Financial Stability Facility (EFSF) and the ESM are agreements under international law concluded by the Member States who ...
... Coordination and Governance in the Economic and Monetary Union (the ‘Fiscal Compact’) were concluded in an intergovernmental setting outside the Treaties; X. whereas the European Financial Stability Facility (EFSF) and the ESM are agreements under international law concluded by the Member States who ...
Martin Feldstein Is There a Role for Discretionary Fiscal Policy? Comment
... stimulus might be one of the best coincident indicators of an economic upturn. It is surprising in light of all of this that Auerbach finds (in Table 2) a substantial and statistically significant use of discretionary fiscal policy in the Clinton years, as reflected in the response of changes in di ...
... stimulus might be one of the best coincident indicators of an economic upturn. It is surprising in light of all of this that Auerbach finds (in Table 2) a substantial and statistically significant use of discretionary fiscal policy in the Clinton years, as reflected in the response of changes in di ...
Is Europe`s economic stagnation inevitable or policy driven?
... change might be overblown, as it was living standards rather than GDP growth that were important; the two were not the same thing. He argued that two issues needed to be tackled nonetheless. First, Europe needed to exploit the opportunity afforded by unprecedentedly low interest rates to invest in i ...
... change might be overblown, as it was living standards rather than GDP growth that were important; the two were not the same thing. He argued that two issues needed to be tackled nonetheless. First, Europe needed to exploit the opportunity afforded by unprecedentedly low interest rates to invest in i ...
Macroeconomic Policy Framework for Structural Transformation of
... investment-growth nexus and engendering an inclusive development path MPs should be embedded in national/regional strategic planning for building strong nation states in regional/continental coordination Coordination and coherence with other policies in a dynamic setting in a system of endogenously ...
... investment-growth nexus and engendering an inclusive development path MPs should be embedded in national/regional strategic planning for building strong nation states in regional/continental coordination Coordination and coherence with other policies in a dynamic setting in a system of endogenously ...
Examining Eurozone Divergence - Sound Ideas
... sufficient enough to ensure healthy convergence among member states. This assumption would later prove to be entirely wishful thinking. The first years of the EMU produced positive overall results. GDP growth was consistent, although not as high as other areas such as the US. Overall unemployment un ...
... sufficient enough to ensure healthy convergence among member states. This assumption would later prove to be entirely wishful thinking. The first years of the EMU produced positive overall results. GDP growth was consistent, although not as high as other areas such as the US. Overall unemployment un ...
d1-am_-_session_2_-_ioana_burla_romania
... diversification of the investment base. 5. In the process of external financing, the debt will be contracted mainly in EUR. 6. The issuances denominated in Euro on the domestic market can be considered only under the circumstances of reimbursement/refinancing of similar instruments issued on the dom ...
... diversification of the investment base. 5. In the process of external financing, the debt will be contracted mainly in EUR. 6. The issuances denominated in Euro on the domestic market can be considered only under the circumstances of reimbursement/refinancing of similar instruments issued on the dom ...
This PDF is a selection from a published volume from
... Part III: Fiscal and monetary policy and stability This section addresses different issues in fiscal and monetary policy. The chapter by Bovenberg and Uhlig provides a quantitative characterization of optimal intergenerational risk sharing in a stochastic overlapping generation model. The analysis, ...
... Part III: Fiscal and monetary policy and stability This section addresses different issues in fiscal and monetary policy. The chapter by Bovenberg and Uhlig provides a quantitative characterization of optimal intergenerational risk sharing in a stochastic overlapping generation model. The analysis, ...
Introduction Analysis of the East African Monetary Union
... Analysis of the East African Monetary Union The first obvious implication of a regional central bank is that the member states would lose their autonomy on monetary policy. National central banks will essentially be subsidiaries of the East African Central Bank, limiting unilateral action by member ...
... Analysis of the East African Monetary Union The first obvious implication of a regional central bank is that the member states would lose their autonomy on monetary policy. National central banks will essentially be subsidiaries of the East African Central Bank, limiting unilateral action by member ...
Impact of the Global Crisis on Emerging Economies
... interest rates and weaker currency and (ii) costs of currency depreciation on unhedged balance sheets Trade-off between (i) LOLR function in face of deposit runs and (ii) avoidance of exchange rate overshooting/loss of monetary control ...
... interest rates and weaker currency and (ii) costs of currency depreciation on unhedged balance sheets Trade-off between (i) LOLR function in face of deposit runs and (ii) avoidance of exchange rate overshooting/loss of monetary control ...
This PDF is a selection from an out-of-print volume from... Bureau of Economic Research
... manufacturing establishments to calculate rates of gross job creation, gross job destruction, and their sum, gross job reallocation. Three central messages emerge from the research in this paper: First, establishment-level employment changes exhibit tremendous heterogeneity, even within narrowly def ...
... manufacturing establishments to calculate rates of gross job creation, gross job destruction, and their sum, gross job reallocation. Three central messages emerge from the research in this paper: First, establishment-level employment changes exhibit tremendous heterogeneity, even within narrowly def ...
Slide 1
... 1. The Maastricht Treaty The treaty signed in 1991 set the rules for monetary union 12 years later. Entry into the monetary union was made conditional on satisfying convergence criteria. A country would be eligible to join the union only if: (i) its inflation rate was not more than 1.5% higher than ...
... 1. The Maastricht Treaty The treaty signed in 1991 set the rules for monetary union 12 years later. Entry into the monetary union was made conditional on satisfying convergence criteria. A country would be eligible to join the union only if: (i) its inflation rate was not more than 1.5% higher than ...
2013Q2 – 06 – CEE - ABN AMRO Insights
... (although they stayed below the neutral 50 mark in the latter two countries). The Russian average for Q1 2013 was almost unchanged over the previous quarter. But in March, the index fell for all four countries suggesting that business confidence took a hit at the end of Q1. Some acceleration in 2013 ...
... (although they stayed below the neutral 50 mark in the latter two countries). The Russian average for Q1 2013 was almost unchanged over the previous quarter. But in March, the index fell for all four countries suggesting that business confidence took a hit at the end of Q1. Some acceleration in 2013 ...
Directed Reading Questions
... What is the tax multiplier and how does it differ from the spending multiplier? What is the goal of expansionary fiscal policy? When should the government enact expansionary fiscal policy? What actions are included in expansionary fiscal policy? What is the goal of contractionary fiscal policy? When ...
... What is the tax multiplier and how does it differ from the spending multiplier? What is the goal of expansionary fiscal policy? When should the government enact expansionary fiscal policy? What actions are included in expansionary fiscal policy? What is the goal of contractionary fiscal policy? When ...
European Fiscal Compact
The Fiscal Compact (formally, the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union; also referred to as TSCG or more plainly the Fiscal Stability Treaty), is an intergovernmental treaty introduced as a new stricter version of the Stability and Growth Pact, signed on 2 March 2012 by all member states of the European Union (EU), except the Czech Republic, the United Kingdom, and Croatia (subsequently acceding the EU in July 2013). The treaty entered into force on 1 January 2013 for the 16 states which completed ratification prior of this date. As of 1 April 2014, it had been ratified and entered into force for all 25 signatories.While the entire treaty applies to ratifying eurozone states, only Title V, covering euro summit participation, automatically applies for ratifying non-eurozone member states. However, these states can attach a declaration to their instrument of ratification stating their desire to also be bound by the treaty's fiscal provisions (Title III) and/or enhanced economic coordination provisions (Title IV). Both Denmark and Romania have declared themselves to be bound by all treaty titles, while Bulgaria declared itself bound by all treaty titles except of Title IV.Member states bound by the fiscal provisions of the treaty will face annual fines up to 0.1% of GDP, if they after one year of the Fiscal Compact entering into force for them, have failed to enact a domestic ""implementation law"" establishing a self-correcting mechanism, guided by surveillance of a governmentally independent fiscal advisory council, which shall guarantee their national budget be in balance or surplus under the treaty's definition. The treaty defines a balanced budget as a general budget deficit not exceeding 3.0% of the gross domestic product (GDP), and a structural deficit not exceeding a country-specific Medium-Term budgetary Objective (MTO) which at most can be set to 0.5% of GDP for states with a debt‑to‑GDP ratio exceeding 60% - or at most 1.0% of GDP for states with debt levels within the 60%-limit. The country-specific MTOs are recalculated every third year and might be set at stricter levels compared to what the treaty allows at most. The treaty also contains a direct copy of the ""debt brake"" criteria outlined in the Stability and Growth Pact, which defines the rate at which debt levels above the limit of 60% of GDP shall decrease.If the budget or estimated fiscal account for any ratifying state is found to be noncompliant with the deficit or debt criteria, the state is obliged to rectify the issue. If a state is in breach at the time of the treaty's entry into force, the correction will be deemed to be sufficient if it delivers sufficiently large annual improvements to remain on a country specific predefined ""adjustment path"" towards the limits at a midterm horizon. Should a state suffer a significant recession, it will be exempted from the requirement to deliver a fiscal correction for as long as it lasts.Despite being an International treaty outside the EU legal framework, all treaty provisions function as an extension to existing EU regulations, utilising the same reporting instruments and organisational structures already created within EU in the three areas: Budget discipline enforced by Stability and Growth Pact (extended by Title III), Coordination of economic policies (extended by Title IV), and Governance within the EMU (extended by Title V). The treaty states that the signatories shall attempt to incorporate the Fiscal Compact into the EU's legal framework, on the basis of an assessment of the experience with its implementation, by 1 January 2018 at the latest.