The European Union has recently implemented one of the biggest reform packages in its history. Developed solutions are designed to (1) strengthen EU's resilience to shocks and (2) improve its shock absorption capabilities. It seems that so far stress was mainly placed on the first objective....

The sustainability of fiscal deficits has been receiving increasing attention from economists. The issue is paramount for the newly formed Euro area and this is one of the motivations of the paper. In order to assess the sustainability of budget deficits in the Euro area, stationarity tests for...

The European Union has recently implemented one of the biggest reform packages in its history. Developed solutions are designed to (1) strengthen EU’s resilience to shocks and (2) improve its shock absorption capabilities. It seems that so far stress was mainly placed on the first objective....

The paper provides a comprehensive overview of the historical problems and causes of the crisis, explains the choices available for the peripheral EU countries and the potential consequences, and discusses potential solutions which take into account how the EU operates. The Eurozone still makes...

This paper presents two issues: First, an effort to decipher the type of economic analysis and macroeconomic policies of the Economic and Monetary Union (EMU) theoretical and policy framework, which we suggest are essentially of the "new consensus" variety; Second, an argument that the...

This paper quantifies the welfare differences among a monetary union, flexible exchange rates (economic disintegration) and a monetary plus fiscal transfer union (higher economic integration). The vehicle of analysis is a medium-scale New Keynesian DSGE model consisting of two heterogeneous...

This paper revisits the issue of cross-country spillovers from fiscal consolidations using an innovative empirical methodology. We find evidence in support of fiscal spillovers in 10 euro area countries. Fiscal consolidation in one country not only reduces domestic output (direct effect), but...

This paper investigates the determinants of nominal yields of government bonds in the eurozone. The pooled mean group (PMG) technique of cointegration is applied on both monthly and quarterly datasets to examine the major drivers of nominal yields of long-term government bonds in a set of 11...