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Tag Archives: fiscal policy

A K-shaped recovery and the role of fiscal policy

The spine of the letter represents the fall in activity at the start of the pandemic. Then there is a split, which leads to the two ‘arms’ that capture the different directions taken by economic activity in different sectors. By: Maria Demertzis Date: March 2, 2021 Topic: European Macroeconomics & Governance This opinion piece was originally published in the Money Review Section of Kathimerini and is forthcoming in El Economista. The shape of the post-pandemic economic...

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COVID-19 credit-support programmes in Europe’s five largest economies

This paper assesses COVID-19 credit-support programmes in five of the largest European economies, and examines how countries have dealt with trade-offs raised by the programmes. In 2020, European governments mitigated the economic impact of COVID-19 lockdowns and other pandemic-fighting programmes through a host of initiatives. These included efforts to support credit, such as guarantees for bank loans, particularly to small- and medium-sized enterprises (SMEs). We present and analyse...

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La dette : une obsession prématurée

Ce qui est malsain, avec la proposition d’annuler la dette, c’est le déni de réalité consistant à affirmer que l’Etat peut effacer une partie de ses engagements sans que cela ne coûte à personne. By: Jean Pisani-Ferry Date: February 22, 2021 Topic: European Macroeconomics & Governance This opinion piece was originally published in Le Monde. En arrivant à la Maison Blanche, Joe Biden a trouvé une dette publique de 27.000 milliards de dollars et un déficit public de 3600...

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The post-coronavirus fiscal policy questions Europe must answer

Europe’s policymakers will have to take a series of decisions in the months ahead, in order to reinstate, and possibly reform, the bloc’s fiscal rulebook. By: Thomas Wieser Date: February 3, 2021 Topic: European Macroeconomics & Governance National fiscal policy has played a vital role in mitigating the socio-economic fallout from the pandemic and the associated containment measures. In the European Union, more space for national fiscal policy was given by the March 2020...

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How government spending shapes the Eurozone economy

The question of how fiscal policy affects the Eurozone economy has received substantial attention over the last decade. Drawing on a new study, Ricardo Duque Gabriel, Mathias Klein and Ana Sofia Pessoa use a novel regional dataset to estimate the effect of fiscal stimulus on factors such as private investment, productivity, consumption and real wages. How does fiscal policy affect the Eurozone economy? Over the last decade, this topic has gained renewed attention among academics and...

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When the future changes the past: fiscal indicator revisions

The 2020 pandemic economic shock has led to reassessment of fiscal policy measures in 2018 and earlier, because of faulty measurement of unobserved output gaps and structural balances. The current period of suspension of EU fiscal rules should be used to design a better fiscal framework. By: Zsolt Darvas Date: January 5, 2021 Topic: European Macroeconomics & Governance The COVID-19 pandemic and the subsequent economic distress caught everyone by surprise. In late 2019,...

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New life for an old framework: redesigning the European Union’s expenditure and golden fiscal rules

Testimony before the European Parliament on the subject of EU fiscal policies. By: Zsolt Darvas Date: November 17, 2020 Topic: European Macroeconomics & Governance On 13 November, 2020 Bruegel senior fellow Zsolt Darvas gave a presentation and participated in the discussion on ‘EU fiscal policies: how to address sustainability of public finances and economic stabilisation’, at the Shadows’ meeting of the Economic and Monetary Committee (ECON) of the European Parliament,...

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New life for an old framework: redesigning the European Union’s expenditure and golden fiscal rules

This briefing paper focuses on two aspects of the EU fiscal framework: whether an expenditure rule would be more reliable than a structural budget balance rule and the possible benefits and drawbacks of introducing a golden rule to exclude certain types of investment from the operational fiscal rule. This study was prepared for the European Parliament’s Committee on  Economic and Monetary Affairs. The study is available on the European Parliament’s online database, ‘ThinkTank‘. Copyright...

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The message in the ruling

The German Constitutional Court's ruling on the ECB's asset purchase programme is open to much criticism but it can hardly be blamed for raising an important question. By: Jean Pisani-Ferry Date: May 12, 2020 Topic: European Macroeconomics & Governance From its pretence to establish itself as a custodian of the custodians to the narrowness of its perspective on central bank policy and the parochial assessment of the distributional consequences of monetary decisions, there is...

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COVID-19: The self-employed are hardest hit and least supported

Self-employed workers are hardest-hit by COVID-19 lockdowns. Yet they often receive less government support than salaried employees. Is the disparity justified? By: Julia Anderson Date: April 8, 2020 Topic: European Macroeconomics & Governance Government support packages to help workers endure the disruptions caused by COVID-19 are ostensibly generous but often discriminatory. In many countries, self-employed workers receive less support than salaried employees. In the...

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