Our main objective here is to assess the macroeconomic incidence of this peculiar fiscal setting when countries in the Euro area face symmetric shocks. Though these shocks are more easily circumvented than asymmetric shocks – the ECB should be able to stabilise the economy without fiscal...

Last year’s International Collaboration Project had helped to highlight several key determinants of potential growth in the European Union (EU): basing upon growth accounting techniques, the main difference between the EU and the US had been shown not to rest on total factor productivity...