This paper investigates the effects of equity market integration on the transmission of monetary policy shocks. Based on the assumption that financial market liberalization and integration lead to falling portfolio holding costs, we analyze its effect on a twocountry DSGE model with staggered prices and endogenous portfolio choice under incomplete markets. The model predicts that the reaction of stock prices, output and RER becomes muted upon impact and less persistence with falling portfolio holding costs. To test for a similar pattern in the data, we estimate a VAR with rolling coefficients for Australia, which provides a good case study. We identify a monetary policy shock with the sign restriction approach. The impulse responses generated by the data are consistent with the prediction of the model and imply that equity market liberalization seems to weaken the impact of monetary policy, at least on stock prices.
This paper presents a reconstruction of the evolution of the EU social agenda from the late 1990s. It shows that – despite being uneven and at times truncated – EU advocacy for social investment as a new social policy paradigm has been increasing over the years. The paper then questions how such advocacy affected European citizens' social rights. Building on two novel databases, which systematically collect information on all EU legislative (binding and non-binding) provisions as well as EU case-law from the end of the 1990s up to 2021, this paper explores EU social investment rights by looking at the power resources that are guaranteed to individuals. It emerges that, despite the broad, coherent, and rich framework for social investment principles offered by the EU, resources allocated to citizens remain quite limited. Citizens are not legally entitled to any specific social investment right, except for work-life balance-related parental and care leaves. Enforcement channels are also only limited to paid leave related issues. Instrumental resources to facilitate access to social investment services are mostly limited to mobile EU citizens.
We consider the real life implementation of some key elements of the new economic governance framework for the euro area. The main findings are the following. The Country Specific Recommendations issued in the context of the European Semester seem to be too little 'specific' to constrain governments in general and even less creditor governments, who so far have been able to ignore them. We argue that the Excessive Imbalances Procedure should be based much more on forward looking variables and on deviations from the euro area average instead of absolute thresholds. The emphasis on cyclically adjusted balances in the reformed Stability and Growth Pact, as well as the Fiscal Compact (formally the TSCG) will face serious problems of implementation given the uncertainties surrounding the estimates of the cyclical component and the frequent revisions this component is subject to. Finally we show that the rationale for fiscal policy coordination, namely spill-over effects from national actions to the rest of the euro area, change nature in different economic circumstances. During a financial crisis much more coordination is desirable than during normal times. This implies that the set of ambitious rules for economic policy coordination created under the impression of the euro crisis might not be appropriate for different circumstances.
This article attempts to identify social investment strategies across EU countries and explain their evolution over the period 2004-18, by using cluster analysis on expenditure and coverage variables and qualitative analysis on selected policy areas to contextualize the results. It finds that strategies have diversified over time in a progressively complex way. After the financial crisis, three main social investment strategies emerge in Europe. They do not overlap with canonical welfare state models, nor have a clear-cut geographical connotation. The strategies are distinct because of their different levels of overall expenditure on social investment but, over time, also by their different life-course orientations. Significant variation within the clusters, in terms of both expenditure and design of social investment policies, indicates that fully-fledged strategies have not yet formed in well-defined groups of countries.
Two of the four macroeconomic adjustment programmes, Portugal and Ireland's, can be considered a success in the sense that the initial expectations in terms of adjustment, both fiscal and external, were broadly fulfilled. A rebound based on exports has taken hold in these two countries, but a full recovery will take years. In Greece the initial plans were insufficient. While the strong impact of the fiscal adjustment on demand could have been partially anticipated at the time, the resistance to structural reforms was more surprising and remains difficult to cure. The fiscal adjustment is now almost completed, but the external adjustment has not proceeded well. Exports are stagnating despite impressive falls in wage costs. In Cyprus, the outcome has so far been less severe than initially feared. It is still too early to find robust evidence in any country that the programmes have increased the long-term growth potential. Survey-based evidence suggests that structural reforms have not yet taken hold. The EU-led macroeconomic adjustment programmes outside the euro area (e.g. Latvia) seem to have been much stricter, but the adjustment was quicker and followed by a stronger rebound.
Two of the four macroeconomic adjustment programmes, Portugal and Ireland's, can be considered a success in the sense that the initial expectations in terms of adjustment, both fiscal and external, were broadly fulfilled. A rebound based on exports has taken hold in these two countries, but a full recovery will take years. In Greece the initial plans were insufficient. While the strong impact of the fiscal adjustment on demand could have been partially anticipated at the time, the resistance to structural reforms was more surprising and remains difficult to cure. The fiscal adjustment is now almost completed, but the external adjustment has not proceeded well. Exports are stagnating despite impressive falls in wage costs. In Cyprus, the outcome has so far been less severe than initially feared. It is still too early to find robust evidence in any country that the programmes have increased the long-term growth potential. Survey-based evidence suggests that structural reforms have not yet taken hold. The EU-led macroeconomic adjustment programmes outside the euro area (e.g. Latvia) seem to have been much stricter, but the adjustment was quicker and followed by a stronger rebound. ; Das Europa-Parlament unterzog soeben das Wirken der Troika im Hinblick auf Rechenschaftslegung, Demokratieprinzip und Transparenz einer kritischen Prüfung. Dieser Beitrag fasst die Kernaussagen einer vom Committee on Economic and Monetary Affairs (ECON) des Europäischen Parlaments in Auftrag gegebenen ausführlichen Studie zusammen. Zwei der vier makroökonomischen Anpassungsprogramme, dasjenige für Portugal und das für Irland, können in dem Sinne als erfolgreich angesehen werden, dass die ursprünglichen Erwartungen bezüglich der fiskalpolitischen und der außenwirtschaftlichen Anpassung weitestgehend erfüllt wurden. Eine auf Exporten basierende Wende ist in beiden Ländern bereits eingetreten. Eine vollständige Erholung wird aber noch viele Jahre benötigen. In Griechenland waren schon die ursprünglichen Pläne unzureichend. Während der starke Einfluss der fiskalpolitischen Anpassung auf die gesamtwirtschaftliche Nachfrage im Prinzip hätte beizeiten antizipiert werden können, war der Widerstand gegen Strukturreformen überraschender und bleibt nur schwer zu überwinden. Die fiskalpolitische Anpassung ist nunmehr fast vollendet. Die außenwirtschaftliche Anpassung ist jedoch nur wenig vorangekommen. Die Exporte stagnieren trotz eindrucksvoller Senkung der Lohnkosten. Anders als Irland und Portugal hat Griechenland nach wie vor Probleme, die Ziele seines Anpassungsprogramms zu erfüllen, seine Wirtschaft schrumpft wieder und die Regierung steht in scheinbar endlosen Verhandlungen über ein neuerliches multilaterales Finanzierungspaket. Warum? Das Problem lässt sich mit einem Wort zusammenfassen: Exporte (oder vielmehr: Mangel an Exportwachstum). Zwei Zahlen zeigen das Dilemma des Landes. Die Regierung hat in 2013 einen primären Haushaltsüberschuss (Haushaltssaldo minus Schuldendienst) erzielt, und Griechenland hat 2013 weniger exportiert als 2012. Dass der griechische Staat erstmals seit Jahrzehnten in der Lage ist, seine Ausgaben mit seinen eigenen Einnahmen zu bezahlen, ist zwar in der Tat ein Meilenstein. Doch wir glauben, dass die zweite Nachricht (der Mangel an Exportwachstum) langfristig die bedeutsamere ist. Für Zypern war das Ergebnis weniger einschneidend als ursprünglich befürchtet. Es ist jedoch noch für alle Programmländer zu früh, robuste Evidenz fuer eine Erhöhung des langfristigen Produktionspotenzials durch die Anpassungsprogramme zu finden. Survey-basierte Evidenz legt nahe, dass Strukturreformen bisher kaum gewirkt haben. Die von der EU geführten makroökonomischen Anpassungsprogramme außerhalb der Eurozone (z.B. Lettland) waren noch viel strikter. Trotzdem erfolgte die Anpassung schneller und mündete in eine schnellere Wende und Erholung.
Two of the four macroeconomic adjustment programmes, Portugal and Ireland s, can be considered a success in the sense that the initial expectations in terms of adjustment, both fiscal and external, were broadly fulfilled. A rebound based on exports has taken hold in these two countries, but a full recovery will take years. In Greece the initial plans were insufficient. While the strong impact of the fiscal adjustment on demand could have been partially anticipated at the time, the resistance to structural reforms was more surprising and remains difficult to cure. The fiscal adjustment is now almost completed, but the external adjustment has not proceeded well. Exports are stagnating despite impressive falls in wage costs. In Cyprus, the outcome has so far been less severe than initially feared. It is still too early to find robust evidence in any country that the programmes have increased the long-term growth potential. Survey-based evidence suggests that structural reforms have not yet taken hold. The EU-led macroeconomic adjustment programmes outside the euro area (e.g. Latvia) seem to have been much stricter, but the adjustment was quicker and followed by a stronger rebound.
The Swiss National Bank's January 2015 decision to abandon the Swiss franc's peg to the euro led to short-term chaos in exchange markets and had a dampening effect on the Swiss economy. Some economists suggested Switzerland was poised to enter a sustained period of stagnation à la Japan. The decision also reignited policy debate on the benefi ts and drawbacks to central bank intervention in currency markets. While such intervention can be justifi ed in certain situations, such as if the market is producing the 'wrong rate', it can also impose signifi cant economic costs. The ECB's recently implemented quantitative easing programme has been regarded by many as a thinly disguised attempt to weaken the euro in order to improve the eurozone's competitiveness. However, the euro's recent weakening began well before the ECB announced its programme; moreover, previous rounds of quantitative easing by other central banks have had minimal impact on exchange rates.
Vigorous debate over the effectiveness of the fiscal adjustment programmes for the crisis-stricken countries in the eurozone has grown quite polarised. In this Forum, several experts use analytical, evidence-based approaches to gauge the effectiveness of these programmes. The role played by the estimates of the fi scal multipliers that the Commission, IMF and ECB used to structure the adjustment programmes is crucial to this debate. If these multipliers were underestimated, as the IMF itself claims, then the negative impact of the fiscal restructuring on already fragile economies would also have been underestimated. Several authors examine the available evidence to determine whether the adjustments programmes were flawed from the outset. Another contribution analyses the effectiveness of structural reforms when monetary policy rates are near the zero lower bound. A final paper uses a case study of Ireland's recovery thus far to examine the actual effects that the programmes have had on the crisis-stricken countries' economies.
