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An early-detection index of fiscal stress for EU countries

Berti, Katia; Salto, Matteo; Lequien, Matthieu - Directorate-General Economic and Financial Affairs, … - 2012

The financial and economic crisis has generated renewed interest, especially among policy-makers, in early-warning systems that could help identifying fiscal and macro-financial vulnerabilities potentially triggering risks. Against this background, this paper presents an early-warning index of...

Persistent link: https://www.econbiz.de/10010602129

Design Failures in the Eurozone - can they be fixed?

Grauwe, Paul de - Directorate-General Economic and Financial Affairs, … - 2013

I analyze the nature of the design failures of the Eurozone. I argue first that the endogenous dynamics of booms and … busts that are endemic in capitalism continued to work at the national level in the Eurozone and that the monetary union in … symmetric so as to avoid a deflationary bias in the Eurozone. I conclude with some thoughts on political unification, and the …

Persistent link: https://www.econbiz.de/10010661291

Effects of fiscal consolidation envisaged in the 2013 Stability and Convergence Programmes on public debt dynamics in EU Member States

Berti, Katia; Castro, Francisco de; Salto, Matteo - Directorate-General Economic and Financial Affairs, … - 2013

This paper presents a simple analysis of the public debt-to-GDP ratio responses to fiscal consolidation efforts envisaged in the 2013 Stability and Convergence Programmes presented by EU Member States. In this paper we assess the response of the debt-to-GDP ratio to the fiscal consolidation...

Persistent link: https://www.econbiz.de/10010705890

Fiscal Policy, Banks and the Financial Crisis

Kollmann, Robert; Ratto, Marco; Roeger, Werner; Jan … - Directorate-General Economic and Financial Affairs, … - 2012

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...

Persistent link: https://www.econbiz.de/10010617932

Fiscal Multipliers and Public Debt Dynamics in Consolidations

Boussard, Jocelyn; Castro, Francisco de; Salto, Matteo - Directorate-General Economic and Financial Affairs, … - 2012

The success of a consolidation in reducing the debt ratio depends crucially on the value of the multiplier, which measures the impact of consolidation on growth, and on the reaction of sovereign yields to such a consolidation. We present a theoretical framework that formalizes the response of...

Persistent link: https://www.econbiz.de/10010558437

Stochastic public debt projections using the historical variance-covariance matrix approach for EU countries

Berti, Katia - Directorate-General Economic and Financial Affairs, … - 2013

Stochastic projections are a powerful tool to feature uncertainty in macroeconomic conditions into the analysis of public debt dynamics. They allow simulating a very large number of debt paths, corresponding to as many shock constellations to the non-fiscal determinants of debt evolution (short-...

Persistent link: https://www.econbiz.de/10010640461

Expected sovereign defaults and fiscal consolidations

Roeger, Werner; Jan in 't Veld - Directorate-General Economic and Financial Affairs, … - 2013

This paper uses a two region DSGE model for the Euro area (periphery vs. core), to analyse the costs of higher sovereign risk premia, the so called 'sovereign risk channel'. We highlight the importance of valuation effects of sovereign bonds in bank balance sheets for the transmission of...

Persistent link: https://www.econbiz.de/10010640462

Rules and risk in the euro area: does rules-based national fiscal governance contain sovereign bond spreads?

Iara, Anna; Wolff, Guntram B. - Directorate-General Economic and Financial Affairs, … - 2010

The strengthening of national fiscal frameworks, including numerical fiscal rules, has recently been proposed as an important part of the economic governance reform package for the EU. The strength of numerical fiscal rules can be described along the dimensions of their statutory base, the room...

Persistent link: https://www.econbiz.de/10008854220

Fiscal stimulus and exit strategies in the EU: a model-based analysis

Roeger, Werner; Jan in 't Veld - Directorate-General Economic and Financial Affairs, … - 2010

Summary for non-specialistsThis paper uses a multi-region dynamic general equilibrium model with collateral constrained households and residential investment to examine the effectiveness of fiscal policy. The presence of credit constrained households makes fiscal policy a more powerful tool for...

Persistent link: https://www.econbiz.de/10010896596

Fiscal policy with credit constrained households

Roeger, Werner; Jan in 't Veld - Directorate-General Economic and Financial Affairs, … - 2009

This paper explores the effects of discretionary fiscal policy in a DSGE model that explicitly models housing investment and allows for credit constrained households along the lines of the financial accelerator literature.The presence of credit constrained households raises the marginal...

Persistent link: https://www.econbiz.de/10008635819