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The combination of discretionary monetary policy, labor-market distortions and nominal wage rigidity yields an inflation bias as monetary policy tries to exploit nominal wage contracts to address labour-market distortions Although an inflation target eliminates this inflation bias, it creates a...
Persistent link: https://www.econbiz.de/10011398780
It is widely argued that Europe's unified monetary policy calls for the international coordination at the fiscal level. We survey the issues involved with such coordination of fiscal policy as a demand management tool and we use a simple model to investigate the circumstances under which...
Persistent link: https://www.econbiz.de/10011400878
We briefly review the theoretical and empirical consequences of discretionary fiscal policy changes, after which we provide our own estimates for the EU countries. A fiscal expansion raises output and consumption and reduces the trade balance. Moreover, the stimulating effect of higher...
Persistent link: https://www.econbiz.de/10003937804
Persistent link: https://www.econbiz.de/10013040786
Based on a conjoint survey experiment we explore the support among European citizens for a European Union (EU) budgetary assistance instrument to combat adverse temporary or permanent economic shocks hitting Member States. Suitably designed, there is quite substantial support for such an EU...
Persistent link: https://www.econbiz.de/10012258505
While the EU recovery plan provides a useful step in alleviating the economic effects of the coronavirus crisis and achieving further European integration, a permanent fiscal stabilization capacity dealing with major crises is still missing. Such a EU-wide stabilization function would be in...
Persistent link: https://www.econbiz.de/10012382236