The European Central Bank - History, role and functions, October 2004
... modern economic life, their issuers, the central banks, grew in importance and the conduct of monetary policy became an essential part of a nation’s economic politics. Against this historical background, the realisation of European Economic and Monetary Union (EMU) at the end of the 20th century was ...
... modern economic life, their issuers, the central banks, grew in importance and the conduct of monetary policy became an essential part of a nation’s economic politics. Against this historical background, the realisation of European Economic and Monetary Union (EMU) at the end of the 20th century was ...
convergence report 1998
... using the unweighted arithmetic average of the rate of HICP inflation in the three countries with the lowest inflation rates, plus 1.5 percentage points. These three countries inflation rates were 1.1% for Austria, 1.2% for France and 1.2% for Ireland, and, adding 1.5 percentage points to the averag ...
... using the unweighted arithmetic average of the rate of HICP inflation in the three countries with the lowest inflation rates, plus 1.5 percentage points. These three countries inflation rates were 1.1% for Austria, 1.2% for France and 1.2% for Ireland, and, adding 1.5 percentage points to the averag ...
the impact of the fiscal policy transmission mechanism on economic
... potential level, which implies pro-cyclical bias in times of prosperity, and that the fiscal stance tends to be predominantly counter-cyclical when actual output is below its potential level. These conclusions can be associated with asymmetric fiscal behaviour after entrance to the euro area because ...
... potential level, which implies pro-cyclical bias in times of prosperity, and that the fiscal stance tends to be predominantly counter-cyclical when actual output is below its potential level. These conclusions can be associated with asymmetric fiscal behaviour after entrance to the euro area because ...
Chapter 1 Fiscal consolidation targets, plans and measures in OECD countries
... their triple A rating and other countries were set to a negative outlook. Figure 1.2 displays the development of long-term sovereign bond yields (ten years) for different sets of countries. First, there are three countries that have long-standing programmes with the EU and/or the IMF (Figure 1.2A). ...
... their triple A rating and other countries were set to a negative outlook. Figure 1.2 displays the development of long-term sovereign bond yields (ten years) for different sets of countries. First, there are three countries that have long-standing programmes with the EU and/or the IMF (Figure 1.2A). ...
Rethinking Monetary–Fiscal Policy Coordination
... during the pre-crisis expansionary period, and fiscal space narrowed following the onset of the financial crisis. Public debt increased sharply during the crisis years and the policy focus turned to an austerity mode when market pressures heightened. Most of the euro area countries still face long-t ...
... during the pre-crisis expansionary period, and fiscal space narrowed following the onset of the financial crisis. Public debt increased sharply during the crisis years and the policy focus turned to an austerity mode when market pressures heightened. Most of the euro area countries still face long-t ...
Commitment versus Discretion in a Political Economy Model of David S. Miller
... dynamic is magnified in my paper. The choices of fiscal policy are not static; the amount of spending is a function of debt and current conditions. Monetary choices will constrain the fiscal side by limiting its budget constraint through price level manipulations. A considerable amount of study of m ...
... dynamic is magnified in my paper. The choices of fiscal policy are not static; the amount of spending is a function of debt and current conditions. Monetary choices will constrain the fiscal side by limiting its budget constraint through price level manipulations. A considerable amount of study of m ...
Fiscal Volatility Shocks and Economic Activity
... timing going forward.1 Will government spending rise or fall? Will taxes rise or fall? And which ones? Taxes on labor or on capital (or both)? And when will it happen? This administration? The next one? In this paper, we investigate whether all of this increased uncertainty about fiscal policy has a ...
... timing going forward.1 Will government spending rise or fall? Will taxes rise or fall? And which ones? Taxes on labor or on capital (or both)? And when will it happen? This administration? The next one? In this paper, we investigate whether all of this increased uncertainty about fiscal policy has a ...
CLAUS BRAND DIETER GERDESMEIER BARBARA ROFFIA May
... prominent role to money. This element – known as the “first pillar” of the strategy – was signalled by the announcement of a quantitative reference value for monetary growth for the broad monetary aggregate M3.1 The other element of the strategy – an analysis of a broad range of several non-monetary ...
... prominent role to money. This element – known as the “first pillar” of the strategy – was signalled by the announcement of a quantitative reference value for monetary growth for the broad monetary aggregate M3.1 The other element of the strategy – an analysis of a broad range of several non-monetary ...
55838_Ch 07_Executive Board Summary.indd
... economies is softening and financial and exchange rate volatility has increased public financing costs for some of them. Meanwhile, lower oil and commodity revenues have created challenges for exporting countries. In this challenging environment, fiscal policy continues to play an essential role—alo ...
... economies is softening and financial and exchange rate volatility has increased public financing costs for some of them. Meanwhile, lower oil and commodity revenues have created challenges for exporting countries. In this challenging environment, fiscal policy continues to play an essential role—alo ...
NBER WORKING PAPER SERIES FISCAL VOLATILITY SHOCKS AND ECONOMIC ACTIVITY Jesús Fernández-Villaverde
... The global financial crisis has strained public finances in the U.S. and in other industrialized countries: fiscal deficits remain exceptionally high and sovereign debt is growing fast. Despite the paralysis of many governments, a dire fiscal consolidation seems inevitable. However, as plainly illus ...
... The global financial crisis has strained public finances in the U.S. and in other industrialized countries: fiscal deficits remain exceptionally high and sovereign debt is growing fast. Despite the paralysis of many governments, a dire fiscal consolidation seems inevitable. However, as plainly illus ...
The relationship between government budget deficit and domestic
... country (Shekar Das, Raj Kumar,Ranee Jayamaha, Dev Useree and Andrew (1999). African countries are facing rising external debt and are being made to ensure the debt is manageable. These attempts include; debt write off by world bank for highly indebted poor countries (HIPC),Public debt management fa ...
... country (Shekar Das, Raj Kumar,Ranee Jayamaha, Dev Useree and Andrew (1999). African countries are facing rising external debt and are being made to ensure the debt is manageable. These attempts include; debt write off by world bank for highly indebted poor countries (HIPC),Public debt management fa ...
The effects of fiscal policy on the conduct and transmission
... fiscal policy stance has an effect on the channels of monetary policy transmission in Zambia. Thus, we conclude that fiscal policy shocks have significant implications for the effectiveness of monetary policy in Zambia. Our evaluation of monetary and fiscal policy in Zambia shows that the country ha ...
... fiscal policy stance has an effect on the channels of monetary policy transmission in Zambia. Thus, we conclude that fiscal policy shocks have significant implications for the effectiveness of monetary policy in Zambia. Our evaluation of monetary and fiscal policy in Zambia shows that the country ha ...
Submissions on EMU from leading academics
... full Monetary Union (EMU). Monetary policy was increasingly put in the hands of independent monetary institutions as exchange rates became more fixed. The ERM was designed to induce convergence on low and stable inflation rates in Europe as a preliminary to full Monetary Union, and on the whole it s ...
... full Monetary Union (EMU). Monetary policy was increasingly put in the hands of independent monetary institutions as exchange rates became more fixed. The ERM was designed to induce convergence on low and stable inflation rates in Europe as a preliminary to full Monetary Union, and on the whole it s ...
Coordinating Public Debt Management with Fiscal and Monetary
... helped generate such virtuous cycle, improving welfare of the society as a whole. What then are the separate policy objectives and the instruments used in the conduct of debt management, fiscal policy and monetary policy? For debt management, the objective is to ensure that the government’s financin ...
... helped generate such virtuous cycle, improving welfare of the society as a whole. What then are the separate policy objectives and the instruments used in the conduct of debt management, fiscal policy and monetary policy? For debt management, the objective is to ensure that the government’s financin ...
Fiscal consolidation
... For many countries, simply stabilising debt would still leave it at high levels. Consolidation requirements would be even more demanding if the aim were to return debt-to-GDP ratios to their pre-crisis levels or to bring those ratios to 60% of GDP. All OECD member countries face growing budgetary pr ...
... For many countries, simply stabilising debt would still leave it at high levels. Consolidation requirements would be even more demanding if the aim were to return debt-to-GDP ratios to their pre-crisis levels or to bring those ratios to 60% of GDP. All OECD member countries face growing budgetary pr ...
Monetary–Fiscal Interactions: How to Improve Policy Outcomes?* Jan Libich, James Savage
... It is clear that different countries have had markedly different fiscal and monetary outcomes. How are we to formally consider such different fiscal ⁄ monetary situations as Japan, the United States, Greece, Zimbabwe or Australia in a unified framework? In his speech Jan framed the medium-term monet ...
... It is clear that different countries have had markedly different fiscal and monetary outcomes. How are we to formally consider such different fiscal ⁄ monetary situations as Japan, the United States, Greece, Zimbabwe or Australia in a unified framework? In his speech Jan framed the medium-term monet ...
CEEC – Transition and Enlargement
... • No, it has a definition of price stability: "Price stability is defined as a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the euro area of below 2%. Price stability is to be maintained over the medium term." “The Governing Council agreed that in the pursuit of price ...
... • No, it has a definition of price stability: "Price stability is defined as a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the euro area of below 2%. Price stability is to be maintained over the medium term." “The Governing Council agreed that in the pursuit of price ...
CEEC – Transition and Enlargement
... • No, it has a definition of price stability: "Price stability is defined as a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the euro area of below 2%. Price stability is to be maintained over the medium term." “The Governing Council agreed that in the pursuit of price ...
... • No, it has a definition of price stability: "Price stability is defined as a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the euro area of below 2%. Price stability is to be maintained over the medium term." “The Governing Council agreed that in the pursuit of price ...
mmi14-Fidrmuc Jan 19104740 en
... government spending or an increase in taxes reduces the aggregate demand and income directly, which leads to negative multiplier effects on the output in the short term. In this case, the government debt ratio may not be reduced as much as expected because both output and tax revenues fall due to co ...
... government spending or an increase in taxes reduces the aggregate demand and income directly, which leads to negative multiplier effects on the output in the short term. In this case, the government debt ratio may not be reduced as much as expected because both output and tax revenues fall due to co ...
No.374 / September 2011 The Cyclical Conduct of Irish Fiscal Policy
... the attainment of e¤ective full employment. Moreover, in addition to joining EMU, there were further important structural shifts in the nature of the Irish economy, most notably associated with the increased integration of the European labour market with the EU accession of the ten Central and Easte ...
... the attainment of e¤ective full employment. Moreover, in addition to joining EMU, there were further important structural shifts in the nature of the Irish economy, most notably associated with the increased integration of the European labour market with the EU accession of the ten Central and Easte ...
Fiscal Rules in Response to the Crisis--Toward the "Next
... In addition to covering rules with specific numerical targets fixed in legislation, we consider also those fiscal arrangements, in particular expenditure ceilings, as fiscal rules for which the targets can be revised, but only on a low-frequency basis (e.g., as part of the electoral cycle) as long a ...
... In addition to covering rules with specific numerical targets fixed in legislation, we consider also those fiscal arrangements, in particular expenditure ceilings, as fiscal rules for which the targets can be revised, but only on a low-frequency basis (e.g., as part of the electoral cycle) as long a ...
THE CYCLICAL CONDUCT OF ESTONIAN FISCAL POLICY
... of stabilization policy is the search for efficiency and the consequential efficiency loss resulting from not reaching it. During an economic downturn, as the government works to employ idle resources, economic activity falls less than it would have in the absence of government intervention (Courtoi ...
... of stabilization policy is the search for efficiency and the consequential efficiency loss resulting from not reaching it. During an economic downturn, as the government works to employ idle resources, economic activity falls less than it would have in the absence of government intervention (Courtoi ...
NBER WORKING PAPER SERIES PRINCIPLE Eric M. Leeper
... financial commitments, but requires the central bank to give up control of inflation. A more likely outcome is some mix of the two options, possibly with policy fluctuating between the two distinct monetary-fiscal regimes. With the mixed outcome, monetary policy would still lose control of inflation ...
... financial commitments, but requires the central bank to give up control of inflation. A more likely outcome is some mix of the two options, possibly with policy fluctuating between the two distinct monetary-fiscal regimes. With the mixed outcome, monetary policy would still lose control of inflation ...
Central Bank Balance Sheet Concerns, Monetary and Fiscal Rules
... ZLB is almost binding, the CB is assumed to conduct monetary policy entirely through the purchase and sale of a real asset. The central bank follows an interest rate rule that reacts to deviations of its net worth and inflation from the corresponding target levels. When a CB is sufficiently worried ...
... ZLB is almost binding, the CB is assumed to conduct monetary policy entirely through the purchase and sale of a real asset. The central bank follows an interest rate rule that reacts to deviations of its net worth and inflation from the corresponding target levels. When a CB is sufficiently worried ...
Stability and Growth Pact
The Stability and Growth Pact (SGP) is an agreement, among the 28 Member states of the European Union, to facilitate and maintain the stability of the Economic and Monetary Union (EMU). Based primarily on Articles 121 and 126 of the Treaty on the Functioning of the European Union, it consists of fiscal monitoring of members by the European Commission and the Council of Ministers, and the issuing of a yearly recommendation for policy actions to ensure a full compliance with the SGP also in the medium-term. If a Member State breaches the SGP's outlined maximum limit for government deficit and debt, the surveillance and request for corrective action will intensify through the declaration of an Excessive Deficit Procedure (EDP); and if these corrective actions continue to remain absent after multiple warnings, the Member State can ultimately be issued economic sanctions. The pact was outlined by a resolution and two council regulations in July 1997. The first regulation ""on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies"", known as the ""preventive arm"", entered into force 1 July 1998. The second regulation ""on speeding up and clarifying the implementation of the excessive deficit procedure"", known as the ""dissuasive arm"", entered into force 1 January 1999.The purpose of the pact was to ensure that fiscal discipline would be maintained and enforced in the EMU. All EU member states are automatically members of both the EMU and the SGP, as this is defined by paragraphs in the EU Treaty itself. The fiscal discipline is ensured by the SGP by requiring each Member State, to implement a fiscal policy aiming for the country to stay within the limits on government deficit (3% of GDP) and debt (60% of GDP); and in case of having a debt level above 60% it should each year decline with a satisfactory pace towards a level below. As outlined by the ""preventive arm"" regulation, all EU member states are each year obliged to submit a SGP compliance report for the scrutiny and evaluation of the European Commission and the Council of Ministers, that will present the country's expected fiscal development for the current and subsequent three years. These reports are called ""stability programmes"" for eurozone Member States and ""convergence programmes"" for non-eurozone Member States, but despite having different titles they are identical in regards of the content. After the reform of the SGP in 2005, these programmes have also included the Medium-Term budgetary Objectives (MTO's), being individually calculated for each Member State as the medium-term sustainable average-limit for the country's structural deficit, and the Member State is also obliged to outline the measures it intends to implement to attain its MTO. If the EU Member State does not comply with both the deficit limit and the debt limit, a so-called ""Excessive Deficit Procedure"" (EDP) is initiated along with a deadline to comply, which basically includes and outlines an ""adjustment path towards reaching the MTO"". This procedure is outlined by the ""dissuasive arm"" regulation.The SGP was initially proposed by German finance minister Theo Waigel in the mid-1990s. Germany had long maintained a low-inflation policy, which had been an important part of the German economy's strong performance since the 1950s. The German government hoped to ensure the continuation of that policy through the SGP, which would ensure the prevalence of fiscal responsibility, and limit the ability of governments to exert inflationary pressures on the European economy. As such, it was also described to be a key tool for the Member States adopting the euro, to ensure that they did not only meet the Maastricht convergence criteria at the time of adopting the euro, but kept on to comply with the fiscal criteria for the following years.