Suchergebnisse

Mit dem Beginn der dritten Stufe der Europäischen Wirtschafts- und Währungsunion haben sich die Bedingungen für die Wirtschaftspolitik in den Teilnehmerstaaten grundlegend verändert. Die EWU schafft ein neues Umfeld für die Wirtschaftspolitik, indem sie Interdependenzen der nationalen Wirtschaftpolitiken der Mitgliedsländer intensiviert bzw. auf der Ebene der Währungsunion neue Interdependenzen schafft. In diesem Papier analysieren wir die Interaktion einer einheitlichen Geldpolitik und nationaler Fiskalpolitiken. In der kurzen Frist, wenn eine nominale Veränderung der Nachfrage reale Outputwirkung zeigt, interagieren Geld- und Fiskalpolitik bei der Bestimmung der aggregierten Nachfrage in der Währungsunion. Damit entsteht ein Konfliktpotential zwischen gemeinsamer Geldpolitik und nationalen Fiskalpolitiken. Wir analysieren dieses Problem und leiten daraus einige Prinzipien für die Koordination der Wirtschaftspolitik in der Währungsunion ab.

We analyze the choice of exchange rate regimes of the 25 transition economies in Europe and the CIS after 1990. The empirical results show that the traditional Optimum Currency Area considerations provide relevant guidance for the exchange rate regime choices in these countries. Moreover, regime choices are influenced by inflation rates, cumulative inflation differentials, and the availability of international reserves. That is, macroeconomic stabilization and the ability to commit to a credible exchange rate peg play important roles in the determination of exchange rate regime choices. Large government deficits have ambiguous effects; they increase the likelihood of moving from a flexible exchange rate to an intermediate peg as well as the likelihood of moving from a fixed to an intermediate peg.

Founded by the late Karl Brunner in 1970, the Konstanz Seminar celebrated its thirtieth anniversary in 1999. Brunner started the Seminar with two objectives, to close the gap in the quality of research and teaching of economics between the United States and Europe, Germany and Switzerland in particular, and to provide an alternative to the dominant Keynesian paradigm to European monetary policy makers. Thirty years ago the Konstanz Seminar was at the fringe of the economics profession; today it is part of the mainstream. This paper reviews the academic and policy accomplishments of the Konstanz Seminar.

The European Monetary Institute (EMI) will prepare a framework for European Monetary Union (EMU) monetary policy during the transition to the EMU. This involves a trade‐off between deepening financial market integration and harmonizing central bank instruments, a choice between centralized and decentralized monetary strategies with significant welfare implications, and a trade‐off between expected welfare and certainty of policy outcomes. As a result of being dominated by national central bankers and of the conflict between the core and the periphery of the European Community (EC), the EMI is biased toward an inefficient solution. Enlargement of the EC by the European Free Trade Area (EFTA) group would raise the probability of a more efficient, two‐track EMU, which initially would involve only the core group.

Fiscal rules, such as the Excessive Deficit Procedure and the Stability and Growth Pact (SGP), aim at constraining government behavior. Milesi-Ferretti (2003) develops a model in which governments circumvent such rules by reverting to creative accounting. The amount of this depends on the reputation cost for the government and the economic cost of sticking to the rule. We provide empirical evidence of creative accounting in the European Union. We find that the SGP rules have induced governments to use stock-flow adjustments, a form of creative accounting, to hide deficits. The tendency to substitute stock-flow adjustments for budget deficits is especially strong for the cyclical component of the deficit, as in times of recession the cost of reducing the deficit is particularly large.

Fiscal rules, such as the excessive deficit procedure and the stability and growth pact (SGP), aim at constraining government behavior. Milesi-Ferretti (2003) develops a model in which governments circumvent such rules by reverting to creative accounting. The amount of this creative accounting depends on the reputation cost for the government and the economic cost of sticking to the rule. In this paper, we provide empirical evidence of creative accounting in the European Union. We find that the SGP rules have induced governments to use stock-flow adjustments, a form of creative accounting, to hide deficits. This tendency to substitute stock-flow adjustments for budget deficits is especially strong for the cyclical component of the deficit, as in times of recession the cost of reducing the deficit is particularly large.

German public finances are currently subject to considerable changes in the macro-economic environment and this is probably only the beginning of more far-reaching developments in the future. Like many other European countries, Germany, on the one hand, faces the fiscal problems emerging from an ageing population, which will put upward pressure on social security expenditures. On the other hand, the public will reject an increase of the already high tax burden and an increasingly globalized economy and further European integration may put an additional limit on the government's capability to raise additional revenues. Finally, German governments will have to show whether they are able to meet these conflicting challenges in the future within the fiscal framework set by the Maastricht Treaty and the Stability and Growth Pact. Therefore, continued debt accumulation does not seem to be a viable option to circumvent the ageing problem and the limit on taxation. Thus we see three challenges for German public finances in the future. In this paper, we develop the recent history of German fiscal policy as a background to judging how fit Germany is to meet these challenges. Our main focus is on the government's fiscal strategies and the gradual erosion of the institutions that secured Germany's fiscal stability in the past.

Despite the fact that banks in Central Europe are burdened by extraordinarily high bad loan ratios, the recent financial crisis in South East Asia and Russia, has not led to a massive failure of banks in the region. In this paper, we study economic trends and policies that may have helped to insulate CEECs from international financial contagion. Answering what went right over the past few years may not only help to further positive developments, but it may also highlight possible weaknesses that could result in future financial instabilities in the banking sectors of CEECs. Using data available from the IMF, and the BIS for nine Central European economies (Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovak Republic, and Slovenia), our results indicate that an economic constellation unique to the early transition period rather than deliberate policy decisions have stabilized the CEECs. Specifically, the lack of recent banking crisis can be attributed to a lack of overly optimistic credit expansion, despite several years of real economic growth, to underdeveloped asset markets, and to a decline of trade relations with the former Soviet Union. Future problems may arise as banks are beginning to extend credit more to an expanding real sector than in the past, as asset markets become more developed, or as export growth to the EU may decline with European growth slowing down. Thus, improvements in bank regulation and bank supervision should receive a high priority among policy makers in CEECs.