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Challenges the European economy began to face 12 years ago raised the question about actions European Central Bank (ECB) have to undertake to maintain the financial sustainability, considering its objective to ensure price stability while coping with a changed economic environment. Provision that the ECB is obliged to take efforts to ensure financial stability as well as potentially serious consequences of crisis' impact on the banking system and industrial production, led to an expansion of its role beyond standard monetary policy measures, with the unconventional steps being taken in addition to conventional to combat the adverse impact of the financial crisis. While reducing the interest rate, ECB also provided a cheap financial capital for banks via fixed-rate "Long Term Refinancing Operations" (LTROs), and three "Covered Bond Purchase Programmes" (CBPP). Purchases of debt securities were also conducted via "Securities Market Programme" (SMP) and, later, with then ECB's President Mario Draghi declaring that ECB will do "whatever it takes to preserve the euro", possibility of their increase was announced with the start of "Outright Monetary Transactions" (OMT) Programme. A mere announcement of the OMT was enough to calm financial markets, as none of the eurozone countries applied for financial support within this programme's framework. Then ECB proceeded with a full-fledged quantitative easing, starting to buy sovereign bonds under its Public Sector Purchase Programme (PSPP), having spent 2.6 trillion € on its implementation. Understanding that a monetary union without an efficient banking union is unacceptably dangerous, the European Banking Union, under which supervision of largest eurozone banks has transferred directly to the ECB, was progressively established. While ECB's anti-crisis policies achieved their goals, prolongation of the strategy it adopted may create new risks for the financial stability of the euro area, such as excessive dependence of credit institutions on monetary support and excessive inflationary risks under a zero interest-rate policy. Still, EU institutions' coordinated financial management played an important role in overcoming the existing turbulence, with fiscal and monetary policy measures reinforcing each other.

Understanding the Ground Rules for the Global Economy In this revised and updated edition of A Concise Guide to Macroeconomics, David A. Moss draws on his years of teaching at Harvard Business School to explain important macro concepts using clear and engaging language. This guidebook covers the essentials of macroeconomics and examines, in a simple and intuitive way, the core ideas of output, money, and expectations. Early chapters leave you with an understanding of everything from fiscal policy and central banking to business cycles and international trade. Later chapters provide a brief monetary history of the United States as well as the basics of macroeconomic accounting. You'll learn why countries trade, why exchange rates move, and what makes an economy grow. Moss's detailed examples will arm you with a clear picture of how the economy works and how key variables impact business and will equip you to anticipate and respond to major macroeconomic events, such as a sudden depreciation of the real exchange rate or a steep hike in the federal funds rate.

In jüngster Zeit gibt es vermehrt Vorschläge, einen Staatsfonds bzw. ein Vermögensportfolio der öffentlichen Hand zur Stärkung der Altersvorsorge oder auch zur Stabilisierung des allgemeinen Staatshaushalts aufzubauen. Vor diesem Hintergrund gibt dieser vom Institut zur Zukunft der Arbeit (IZA) erstellte Forschungsbericht eine Übersicht über die strukturellen Charakteristika ausgewählter staatlich organisierter oder verwalteter Fonds, die in anderen Ländern bereits etabliert sind. Wichtig für die Auswahl war, dass die Fonds ein substanzielles Volumen (gemessen in Relation zum jeweiligen BIP) erreicht haben und primär dem Zweck der Absicherung von Alterseinkünften dienen. Neben einer ländervergleichenden Charakterisierung zentraler Merkmale dieser Staatsfonds werden auch in Kurzdarstellungen der betrachteten Staatsfonds Problemlagen der jüngeren Vergangenheit betrachtet.

AbstractControls on international capital flows were a central issue for the International Monetary Fund at Bretton Woods in 1944. But by the 1970s, mainstream thinking was encouraging open capital flows. A succession of damaging crises followed: Latin America in the 1980s, Mexico again in 1994, and Asia in 1997. Fund policies were tweaked, but the causes were seen as being largely in the recipient countries. Capital controls were specifically rejected.Nevertheless, the Fund's view began to shift, probably encouraged by the 2008 global financial crisis. There was a growing recognition that the capital-flow surges at the heart of these crises were often externally driven, reflecting global factors. The appropriate response would include capital flow management (CFM). The Fund recognized this in its 2012 Institutional View, but CFM was at the bottom of the policy toolbox, surrounded by conditions and constraints, maintaining the stigma on CFM.Meanwhile many emerging economies were enhancing their ability to cope with excessive capital flows, although at some cost (slower growth, tighter fiscal policy, large foreign-exchange reserves). At the same time the flows were increasing, with a bigger component of flighty portfolio flows. CFM measures still have an important place in this new environment, but the Fund's reluctance to embrace them means that a deep discussion on operationalizing effective CFMs is still lacking.

A Brookings Institution Press and the Center for the New Economy publication A non-incorporated territory of the United States, Puerto Rico operates under U.S. legal, monetary, security and tariff systems. Despite sharing in these and other key U.S. institutions, Puerto Rico has experienced economic stagnation and large scale unemployment since the 1970s. The island's living standards are low by U.S. standards, with a per capita income only half that of Mississippi, the poorest state. While many studies have analyzed the fiscal implications of Puerto Rico's political relationship with the United States, little research has focused broadly on the island's economic experience or assessed its growth prospects. In this innovative new book, economists from U.S. and Puerto Rican institutions address a range of major policy issues affecting the island's economic development. To frame the current situation, the contributors begin by assessing Puerto Rico's past experience with various growth policies. They then analyze several reforms and new initiatives in labor, education, entrepreneurship, fiscal policy, migration, trade, and financing development, which they incorporate into a proposed strategy for jumpstarting Puerto Rican economic growth. Contributors include Gary Burtless (Brookings Institution); Orlando Sotomayor, Luis Rivera-Batiz, Ramón Cao, Maria Enchautegui, José Joaquín Villamil, Eileen Segarra, Marinés Aponte, and Juan Lara (University of Puerto Rico); Richard Freeman and Robert Lawrence (Harvard University); Helen Ladd (Duke University); Francisco Rivera-Batiz (Columbia University); Steven Davis and Bruce Meyer (University of Chicago); James Alm (Georgia State University); Ingo Walter, Rita Maldonado-Bear, and William Baumol (New York University); Belinda Reyes (University of California, Merced); Alan Krueger (Princeton University); Carlos

Стаття присвячена аналізу міжнародної інвестиційної позиції України (МІП) з метою визначення шляхів її покращення. Авторами досліджено МІП основних країн світу та визначено країни Європейського Союзу з найвищим дефіцитом МІП у порівнянні з ВВП. У статті проаналізовано динаміку та структуру активів та зобов'язань України, а також визначені основні ризики, переваги та недоліки потоків прямих іноземних інвестицій в Україні. У статті висловлено припущення, що поліпшення фіскальної політики, включаючи податкове законодавство, сприятиме покращенню МІП в Україні. Надійна податкова політика сприяє залученню іноземних інвестицій в економіку країни та може структурно поліпшити інвестиційну позицію та запобігти неконтрольованому відтоку капіталу. Необхідно прийняти пакет законів анти-BEPS для боротьби з ухиленням від оподаткування і розкриття інформації про власність та ввести податок на виведений капітал. У статті визначені основні переваги цієї моделі оподаткування. ; This article is devoted to the analysis of Ukraine's International Investment Position (IIP) for the purpose of identifying ways to improve it. The authors investigated the IIP of the main countries of the world. They identified the countries of the European Union with the highest net IIP deficit relative to GDP. This article analyzes the dynamics and structure of Ukraine's assets and liabilities to determine how they came to be. This article also identifies the main risks, advantages, and disadvantages of foreign direct investment flows in Ukraine. The article will suggest that improved fiscal policy, including tax legislation, will enhance Ukraine's IIP. A sound tax policy promotes foreign investments into the country's economy, can structurally improve the investment position, and prevents uncontrolled capital outflow. It is necessary to adopt a package of anti-Base Erosion and Profit Shifting (BEPS) laws against tax evasion and against disclosure of other property information to implement the capital transfer tax. The article identifies the main advantages of this model of taxation.

Стаття присвячена аналізу міжнародної інвестиційної позиції України (МІП) з метою визначення шляхів її покращення. Авторами досліджено МІП основних країн світу та визначено країни Європейського Союзу з найвищим дефіцитом МІП у порівнянні з ВВП. У статті проаналізовано динаміку та структуру активів та зобов'язань України, а також визначені основні ризики, переваги та недоліки потоків прямих іноземних інвестицій в Україні. У статті висловлено припущення, що поліпшення фіскальної політики, включаючи податкове законодавство, сприятиме покращенню МІП в Україні. Надійна податкова політика сприяє залученню іноземних інвестицій в економіку країни та може структурно поліпшити інвестиційну позицію та запобігти неконтрольованому відтоку капіталу. Необхідно прийняти пакет законів анти-BEPS для боротьби з ухиленням від оподаткування і розкриття інформації про власність та ввести податок на виведений капітал. У статті визначені основні переваги цієї моделі оподаткування. ; This article is devoted to the analysis of Ukraine's International Investment Position (IIP) for the purpose of identifying ways to improve it. The authors investigated the IIP of the main countries of the world. They identified the countries of the European Union with the highest net IIP deficit relative to GDP. This article analyzes the dynamics and structure of Ukraine's assets and liabilities to determine how they came to be. This article also identifies the main risks, advantages, and disadvantages of foreign direct investment flows in Ukraine. The article will suggest that improved fiscal policy, including tax legislation, will enhance Ukraine's IIP. A sound tax policy promotes foreign investments into the country's economy, can structurally improve the investment position, and prevents uncontrolled capital outflow. It is necessary to adopt a package of anti-Base Erosion and Profit Shifting (BEPS) laws against tax evasion and against disclosure of other property information to implement the capital transfer tax. The article identifies the main advantages of this model of taxation.

Abstract.  It seems there is a pessimistic view about the need and effectiveness of industry policy in an era of unprecedented globalization. The discussion about industry policy has been mostly on the fiscal, credit, and tariff measures, which are generally designed to favor particular activities. However, the rationale for industrial policy does not have to be the infant industry argument or market failures and knowledge spillover. In advanced industrial countries, the rationale for industry policy arises from the need to constantly restructure their economies to maintain competitiveness. The lesson that mature democracies can learn from East and Southeast Asia is the importance of consensual policy making, especially in the realm of the labor market. Such policies have not only helped them maintain macroeconomic stability but also accelerated industrial restructuring.

The aim of this thesis is to examine the implications of structural heterogeneities in the policy framework of the euro area. The first step is to analyse the extent to which structural heterogeneities and the introduction of a financial stability objective assigned to the central bank influence the coordination of monetary and fiscal authorities as well as the economic stabilization that follows after shocks. Noteworthy is the increasing relevance of coordination with the degree of heterogeneity on the one hand and a proactivity of the central bank on the other hand, which improve / corrupts cyclical stabilization according to the type of shock after a financial stability objective has been added. Next step is to examine the fiscal reaction functions in the euro area to demonstrate the heterogeneity of government fiscal behavior on the one hand and the determinants of these fiscal policies on the other. Finally, we look at the impact of the single monetary policy on the euro area Member States and highlight a completely heterogeneous transmission of monetary policy, caused in particular by structural heterogeneities in productive specializations, functioning of financial and labor markets, just to name a few. Here, we ask about the relevance of single monetary policy in the context of heterogeneous monetary union without any mechanism of adjustment. ; Cette thèse a pour objectif d'étudier l'implication des hétérogénéités structurelles dans le cadre des politiques économiques de la zone euro. Nous étudions d'abord dans quelles mesures ces hétérogénéités et l'introduction d'un objectif de stabilité financière attribué à la banque centrale affectent la stabilisation conjoncturelle suite aux chocs et la coordination entre les autorités monétaires et budgétaires. Nous montrons la pertinence croissante de la coordination avec le degré d'hétérogénéité et la pro-activité de la banque centrale suite à l'ajout de l'objectif de stabilité financière qui améliore/dégrade la stabilisation conjoncturelle selon le type de choc. Ensuite, nous étudions des fonctions de réaction budgétaire nationales qui démontrent l'hétérogénéité des comportements budgétaires des gouvernements et les différents déterminants des politiques budgétaires. Enfin, nous mettons en évidence l'impact hétérogène de la politique monétaire unique sur les pays membres. Ceci s'explique notamment par des caractéristiques structurelles hétérogènes dans les spécialisations productives, dans le fonctionnement des marchés financiers, marchés du travail etc. De même, nous posons la question de la pertinence d'une politique monétaire unique dans le cadre d'une union monétaire hétérogène, en l'absence de mécanisme d'ajustement.

В статье проанализирован феномен фискального федерализма. Исследованы риски потери фискального суверенитета и положительные последствия от унификации фискальной политики в рамках валютного союза. Подчеркнута важность показателя фискальной позиции страны при определении ее способности присоединиться к фискальному союзу. ; The phenomenon offiscal federalism is analyzed. Risks of the loss offiscal sovereignty and positive effects from standardization offiscal policies within the boundaries of a currency union are studied. Emphasis is made on the importance of the measure of fiscal position of a country in evaluating its capacity to join a fiscal union. The conditions are analyzed, required to implement the idea of fiscal federalism. The assumption is put forward and grounded theoretically about a positive correlation between the degree of decentralization of a government and the government's capacity to secure effective distribution of social benefits. In view of the theory of optimal currency zones, the situation is considered when monetary union leads to integration of financial markets and development of monetary mechanisms for risks sharing. It is assumed that these mechanisms may be substituted by taxation and budgetary policy, because they weaken the effects of asymmetrical shocks. Operation of sub-national debt markets is studied, with analyzing a range of preliminary conditions effectuating their dynamics and peculiarities. Peculiarities of fiscal and monetary policies mix are analyzed, with investigating the mechanisms that can trigger by-side effects or the so called externalities in the currency union member states. It is argued that once a single monetary authority and numerous fiscal bodies are established, they would require fiscal limitations, in order to prevent excessive deficit at sub-regional level, or in member states in case of Eurozone. Emphasis is made on the effective impact of fiscal discipline on lending process. The impact of budgetary federalism on the development of a country undergoing asymmetric shocks is considered, mechanisms to mitigate their negative effects are discussed.