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How the Euro Crisis Evolved and How to Avoid Another: EMU, Fiscal Policy and Credit Ratings

Polito, Vito; Wickens, Michael R. - C.E.P.R. Discussion Papers - 2013

This paper argues that the crisis was an outcome of EMU: setting a common monetary policy for countries with different initial inflation rates. The crisis countries were those with high inflation rates which then had negative real interest rates and consequently over-borrowed. Current policy...

Persistent link: https://www.econbiz.de/10011084346

Fiscal targets. A guide to forecasters?

Paredes-Lodeiro, Joan; Pérez, Javier J; … - C.E.P.R. Discussion Papers - 2015

Should rational agents take into consideration government policy announcements? A skilled agent (an econometrician) could set up a model to combine the following two pieces of information in order to anticipate the future course of fiscal policy in real-time: (i) the ex-ante path of policy as...

Persistent link: https://www.econbiz.de/10011272708

Separation of Powers and the Budget Process

Grossman, Gene; Helpman, Elhanan - C.E.P.R. Discussion Papers - 2006

We study budget formation in a model featuring separation of powers. In our model, the legislature designs a budget bill that can include a cap on total spending and earmarked allocations to designated public projects. Each project provides random benefits to one of many interest groups. The...

Persistent link: https://www.econbiz.de/10005791745

Fiscal Rules and Fiscal Performance in the EU and Japan

von Hagen, Jürgen - C.E.P.R. Discussion Papers - 2005

Fiscal rules specify quantitative targets for key budgetary aggregates. In this paper, we review the experience with such rules in Japan and in the EU. Comparing the performance of fiscal policy in the 1980s and 1990s until 2003, we find that the fiscal rule of the 1980s exerted some but not...

Persistent link: https://www.econbiz.de/10005124378

Spread the News: How the Crisis Affected the Impact of News on the European Sovereign Bond Markets

Beetsma, Roel; de Jong, Frank; Giuliodori, Massimo; … - C.E.P.R. Discussion Papers - 2012

We investigate how "news" affected domestic interest spreads vis-à-vis Germany and how it propagated to other countries during the recent crisis period, thereby distinguishing between the so-called GIIPS countries and other European countries. We make original use of the Eurointelligence...

Persistent link: https://www.econbiz.de/10011083333

The Confidence Effects of Fiscal Consolidations

Beetsma, Roel; Cimadomo, Jacopo; Furtuna, Oana; … - C.E.P.R. Discussion Papers - 2014

We explore how fiscal consolidations affect private sector confidence, a possible channel for the fiscal transmission that has received particular attention recently as a result of governments embarking on austerity trajectories in the aftermath of the crisis. Panel regressions based on the...

Persistent link: https://www.econbiz.de/10011083434

What Do Deficits Tell us About Debts? Empirical Evidence on Creative Accounting with Fiscal Rules in the EU

von Hagen, Jürgen; Wolff, Guntram B. - C.E.P.R. Discussion Papers - 2004

Fiscal rules, such as the excessive deficit procedure and the stability and growth pact (SGP), aim at constraining government behaviour. Milesi-Ferretti (2003) develops a model in which governments circumvent such rules by reverting to creative accounting. The amount of this creative accounting...

Persistent link: https://www.econbiz.de/10005656275

Expanding the Welfare System: A Proposal for Reform

Orszag, Mike; Snower, Dennis J. - C.E.P.R. Discussion Papers - 1997

This proposal involves the establishment of ‘welfare accounts’ for every person in a country. There are four accounts: a retirement account (covering pensions), an unemployment account (covering unemployment support), a human capital account (covering education and training), and a health...

Persistent link: https://www.econbiz.de/10005661484

Budget Processes: Theory and Experimental Evidence

Ehrhart, Karl-Martin; Gardner, Roy J; Keser, Claudia; … - C.E.P.R. Discussion Papers - 2001

bottom-up budget process. We show, using structurally induced equilibrium theory, that this need not be the case. To test the … implications for budget processes of structurally induced equilibrium theory, we conduct a series of experiments. The evidence from … these experiments supports the predictions of structurally induced equilibrium theory, both at the aggregate and at the …

Persistent link: https://www.econbiz.de/10005662099

National Insolvency: A Test of the US Intertemporal Budget Constraint

Uctum, Merih; Wickens, Michael R. - C.E.P.R. Discussion Papers - 1990

If a nation fails to satisfy its intertemporal budget constraint (IBC) then, like a government or a household, either it will become insolvent or it can consume more of its income. The main purpose of this paper is to establish necessary and sufficient conditions for a nation to satisfy its IBC,...

Persistent link: https://www.econbiz.de/10005666888