type="main" xml:lang="en" <title type="main">SUMMARY</title> </section> <title type="main">Fiscal policy in the EU
ARE OFFICIAL OUTPUT FORECASTS BIASED?</title> <p> We point out that official forecasts of output dynamics are crucial to the assessment of cyclically adjusted budget balances, and provide evidence that in some euro-area countries biased forecasts...</p>

In current practice, changes in the cyclically-adjusted budget balance (CAB) are interpreted as reflecting the effort of discretionary fiscal policy. This paper shows that such an interpretation is not a sufficiently accurate description of the behaviour of fiscal policy, as, in some cases, it...

The global financial and economic crisis has revived the debate in the academic literature and in policy circles about the size and effectiveness of automatic fiscal stabilisers. Especially in the euro area where monetary policy is centralised and discretionary fiscal policy making is...

The recent financial crisis has been characterized by unprecedented monetary policy interventions of central banks with the intention to stabilize financial markets and the real economy. This paper sheds light on the actual impact of monetary policy on stock liquidity and thereby addresses its...

Restoring sustainable public finances in the aftermath of the Great Recession is a key challenge in most EU countries. In order to learn from history, our paper examines consolidation episodes in the EU since 1970. We shed light on the factors that favour the start of a consolidation episode and...

It is often argued that fiscal stabilisation in the euro area compares unfavourably with the USA, not least because of the perceived limitations of the stability and growth pact. This paper qualifies this perception. It examines a number of elements which are generally overlooked or not...

Real-time estimates of potential output are used for the calculation of the cyclically adjusted budget balance, one of the main indicators in the assessment of the fiscal performance of EU member states. The estimation of potential output involves a decomposition of actual output into a cyclical...