Risk-sharing shall allow asymmetric shocks smoothing into a monetary union. Three adjustment channels could play: public transfers, credits, financial incomes between regions/countries. The literature underlines the actual weakness of this mechanism in Europe whereas it tends generally to...

Tax cuts create simultaneously a lack of tax receipts and more savings ready to be changed into public bonds and compensate this shortage of tax revenue. A part of tax resources is replaced by borrowing and those who are enjoying tax cuts are also receiving interest from government. The...

The deficit of health insurance, about 1 percentage point of GDP mainly results from the economic crisis which reduced social contributions. This deficit contributes to the automatic stabilization of the economy and it should disappear with the return of growth. As far as it is not returned, the...

In this paper it is analyzed whether capital depreciation allowances are good instruments for redistribution in the long run. In a simple two-class economy it is shown that in the short run and absent optimizing behaviour accelerated depreciation is good for growth and may stabilize investment...

We study the relationship between the change in the cyclically-adjusted primary balance and the change in the output gap. The former variable is taken as an indicator of discretionary fiscal policy. The latter is an indicator of cyclical conditions. We use panel data for the euro area and data...

This article aims at evaluating potential growth for France, Germany and the euro area during the period from after the 2007-2008 credit crisis until 2012. Such an assessment plays a central role in the determination of the structural deficit and therefore in the definition of consolidation...

In France, the public finances laws still ignore widely the issue of budget balance. The financial crisis makes this silence worrisome and numerous voices advocate for the establishment of a budget balance rule in the Constitution which would determine numerical limits to deficits. Nevertheless...

The policy-mix is modelled using the contributions of modern finance: derivatives, securization, collateral. Debt and equities are European put and call of real assets, which price follows a non-logarithmic stochastic process. The decision of bankruptcy is the exercise of an option, which...

Even though the EU clearly leads the global fight against climate change and despite the additional reduction in emissions due to the global crisis and European recession, the ambitious objectives flagged in the ?20-20-20 by 2020? strategy and ?climate-energy package ? may be out of reach if a...

While most economists accept the desirability of expansion of deficits over the short term there are a number of theoretical arguments that lead to the conclusion that higher government debt ratios might depress growth or lead to national insolvency. These have been further ?strengthened?...