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Sinn, Hans-Werner - 2018

While the ECB helped mitigate the euro crisis in the aftermath of Lehman, it has stretched its monetary mandate and moved into fiscal territory. This text describes and summarizes the crucial role played by the ECB in the intervention spiral resulting from its bid to manage the crisis. It also...

Persistent link: https://www.econbiz.de/10012918640

How Do Monetary and Fiscal Policy Interact in the European Monetary Union?

Canzoneri, Matthew B. - 2012

Formation of the Euro area raises new questions about the coordination of monetary and fiscal policy. Using a New Neoclassical Synthesis (NNS) model, we show that a common monetary policy, responding to area-wide aggregates, has asymmetric effects on countries within the union, depending on...

Persistent link: https://www.econbiz.de/10013100660

Monetary-Fiscal Interactions and the Euro Area's Malaise

Jarocinski, Marek - 2017

When monetary and fiscal policy are conducted as in the euro area, output, inflation, and government bond default premia are indeterminate according to a standard general equilibrium model with sticky prices extended to include defaultable public debt. With sunspots, the model mimics the recent...

Persistent link: https://www.econbiz.de/10012948448

Pandemic Shocks and Fiscal-Monetary Policies in the Eurozone : COVID-19 Dominance During January - June 2020

Jinjarak, Yothin - 2020

This case study compares the importance of prevailing market factors against that of COVID-19 dynamics and policy responses in explaining the evolution of Eurozone (EZ) sovereign spreads during the first half of 2020. Focusing on daily Eurozone CDS spreads, we adopt a multi-stage econometric...

Persistent link: https://www.econbiz.de/10012829783

The Influence of Actual and Unrequited Interventions

Dominguez, Kathryn M. - 2007

Intervention operations are used by governments to manage their exchange rates but officials rarely confirm their presence in the market, leading inevitably to erroneous reports in the financial press. There are also reports of what we term, unrequited interventions, interventions that the...

Persistent link: https://www.econbiz.de/10012777395

Inspecting the Mechanism : Leverage and the Great Recession in the Eurozone

Martin, Philippe J. - 2014

We provide a comprehensive account of the dynamics of eurozone countries from 2000 to 2012. We analyze private leverage, fiscal policy, labor costs and interest rates and we propose a strategy to separate the impact of credit cycles, excessive government spending, and sudden stops. We then ask...

Persistent link: https://www.econbiz.de/10013045645

Do Balanced Budget Rules Work? U.S. Experience and Possible Lessons for the Emu

Inman, Robert P. - 2021

convergence conditions for entry and continued membership in the EMU: 1) a country's overall budget deficit for each fiscal year …. Will the current EMU Excessive Deficit Procedure work as an effective constraint on countries' deficit behaviors? When …, and costly to amend. While ex post, constitutionally grounded, and difficult to amend, current EMU rules are not enforced …

Persistent link: https://www.econbiz.de/10013223574

Fiscal Policy and Monetary Integration in Europe

Galí, Jordi; Perotti, Roberto - 2021

discretionary budget deficit over the period 1980-2002, using data on EMU countries and control groups of non-EMU EU countries and … EMU countries has become more countercyclical over time, following what appears to be a trend that affects other … industrialized countries as well. Similarly, we find that the decline in public investment experienced over the last decade by EMU …

Persistent link: https://www.econbiz.de/10013239944

A Fiscal Union for the Euro : Some Lessons from History

Bordo, Michael D. - 2011

The recent financial crisis 2007-2009 was the longest and the deepest recession since the Great Depression of 1930. The crisis that originated in subprime mortgage markets was spread and amplified through globalised financial markets and resulted in severe debt crises in several European...

Persistent link: https://www.econbiz.de/10013120322

Over-Optimistic Official Forecasts in the Eurozone and Fiscal Rules

Frankel, Jeffrey A. - 2012

Why do countries find it so hard to get their budget deficits under control? Systematic patterns in the errors that official budget agencies make in their forecasts may play an important role. Although many observers have suggested that fiscal discipline can be restored via fiscal rules such as...

Persistent link: https://www.econbiz.de/10013102194