Suchergebnisse

How to fight against mass unemployment in Europe ? Henri Sterdyniak, Emmanuel Fourmann, Frédéric Lerais (OFCE), Henri Delessy, Frédéric Busson (СЕРП) In 1994, the number of unemployed in the European Union should exceed 18 million, which means a 12 % unemployment rate. According to our projection, the US recovery and the continuing interest rate cuts in Germany should not provide sufficient economic growth to limit the rise of unemployment in most European countries. What can economic policy do ? As a contribution to the debate, this paper discusses the effects on unemployment of different economic policy measures. It uses, whenever possible, the MIMOSA model. A policy based on a quick reduction of fiscal deficits or on wage moderation would further limit demand, and would therefore prolong stagnation. Protectionnist measures against imports from low-wage regions are hardly conceivable, for both political and economic reasons. A strategy of sharply reducing the duration of work, together with a partial wage-compensation and a reorganisation of the production system, could certainly allow a major reduction in the unemployment rate without unbearable inflation. However neither firms nor already employed people have a clear interest in such a change. A more determined economic policy is then necessary. It should combine an important and rapid decrease in interest rates along with a temporary fiscal expansion, the latter including either cuts on employers' contribution (focusing on low wages), or tax reductions for households, or a raise in public investment. Our calculations give the requested order of magnitude and yield a strong conclusion : such a strategy could be efficient, at a limited budgetary cost, and without getting rid of the price stability target. It could therefore meet full support from the monetary authorities.

Growth : the lost secret ? Équipe MIMOSA Since 1990, growth in the industrial countries has become again insufficient to prevent a further rise in unemployment. The announced recovery has been quite weak in 1992, except in the United States. Will it happen in 1993 and 1994 ? The dollar's rise, resulting of the decreasing gap between Germany and US interest rates, should moderate US activity, and stimulate the European growth. Inflation remains weak and oil and raw materials prices are stable. A strong recovery in investment is difficult to forecast as the capacity rates of utilisation remain low. Despite the decrease in nominal interest rates, real rates remain high. Consumption is weak, and fiscal policies generally restrictive. In the middle term (1994-2000), the average growth for OECD countries should be 2.4 % per year. The United States, having budgetary constraints and low productivity, should grow at only 2.2 %. Japan should slowly emerge from its present problems, reaching a 3.3 % growth. In Europe, West Germany should match again its potential growth (2.4 %), which should imply a global rate of 3 % a year for a unified Germany. The United Kingdom should acknowledge a certain recovery after its 2 year-long deep recession, with an average growth of 2.2 %. Growth in France should also be 2.2 %. Enduring rigorous fiscal policy, Italy should grow at only 1.9 % a year. The world GDP should rise 1.6 % in 1993, and 3.3 % a year from 1994 to 2000, due to the upsurge of New Industrial Countries, India and China. Eastern countries should enjoy sustained growth, but their production level should remain 15 % lower in 2000 than its 1989-level. The OECD growth should be quite weak, as economic policies hesitate between sustaining growth and balancing public and external accounts. Having accepted to deepen their budget deficit in 1991-1993, numerous governments are now limiting their spending and rising taxes, which is lowering activity. Nominal interest rates are low as inflation and growth are weak, but real interest rates remain far higher than the real growth rate. Low wage rises and the high level of unemployment both weigh on final consumption, leading firms to perceive low demand. European countries generally hesitate to devalue, along with a wage- freeze, that should perhaps reduce their unemployment rate due to competitiveness gains, but more surely endanger the European union process. Drastic policies to secure World economic growth, such as reducing real interest rates, sending massive capital flows toward East and South or co-ordinating fiscal stimulation, do not meet with unanimity among neither governments nor economists. The secret of growth seems to have been lost.

The article presents a medium-term projection of the world economy carried out with MIMOSA, a model jointly built and teamed by CEPII and OFCE.
The 1991-1992 period represents a break after the 80' s sharp growth impulsed by the oil counter-shock. The slow-down, which took place first in the United-States and the United-Kingdom, reached Continental Europe a year later, and is now effective in Japan. In the 1992-1993 period, the recovery will be soft : OECD growth will raise from 0,9 % in 1991 to 1,7% in 1992, and will reach 2,9% in 1993. In the United-States, the lack of fiscal support will limit the recovery, and the stimulating monetary policy will only have a small impact on consumption : households would reduce their debt burden rather than increase their consumption expenditures. Growth will reach 1,9 % in 1992 and 2,7 % in 1993. As direct effects of the German Unification will be over, measures to finance the former East Germany rebuilding and a restrictive monetary policy will keep on slowing German growth and hence the European one in 1992 and 1993. European growth will reach 1,6 % in 1992 and 29 in 1993. Inflation rates will be rather moderate in EEC countries except for the German one because of persistent wages pressures. The inflation rate will settle down to about 3 % in France whereas inflation rate will reach 4,5 % in 1992 and 4,1 % in 1993 in West Germany. There will be no major inflationary pressure in the United-States. In the middle run growth will lack driving forces The average annual growth rate will be 2,7 % for OECD countries from 1992 to 1997, of which 3,4 % in Japan 2,7 % in EEC and 2,5 % in the United-States, growth will cope with supply constraints in the United-States, Japan and Germany whereas in countries where unemployment is high (such as France, Italy and the United-Kindgom) economic policies will remain under the constraint of reaching external balance and/or public finance targets.

The article presents the first medium-term projection of the world economy made using MIMOSA, a model built jointly by the CEPII and the OFCE.
After the unexpectedly good performance of the world economy in 1988, a period of slow down could take place in 1989/1990, resulting in part from strong anti-inflationary policies.
Growth in OECD countries would settle at around 3 % a year until 1 993. There would nevertheless be significant differences : growth would be moderate in the United States (2 % a year over the 1988-1993 period), while still vigorous in Japan (4,5 %) ; growth in the EEC would be one point higher than it was between 1979 and 1987, but still disappointing (2,7 %). After a period of lower growth rates than its Européen partners (1983-1987), France would reach the 2,6 % EEC average. The situation would be more propitious for developing countries in Latin America and Africa, which would gradually begin growing again, while Asia as a whole would see particularly strong growth. Inflation would remain under control : it would be weak in Japan, West Germany and France (respectively 1,4, 1,1 and 2,5 % in 1993). It would be significatly higher in the United States (5,4 %).
Oil prices would stabilise in real terms before increasing slowly at the beginning of 1 990. In spite of the dollar's nominal depreciation, (1 ,5 mark and 95 yen) and of the slow down of American growth, imbalances would remain : the United States current account deficit would reach 3,2 % of GNP by the end of the period, while Japaneese and German surpluses would persist.
Finally, disparities in Europe would gradually worsen. Whereas the unemployment rate would remain at a high level in France and Italy (1 1 %), it would decrease steadily in Germany, to reach 5,3 % in 1993, while remaining below its 1987 level in the United Kingdom. Meanwhile, large gaps would remain as far as public accounts are concerned, French discipline contrasting with a persistant deficit in Italy, and the external debt of the United Kingdom would grow. Even though a low inflation rate could be maintained (except for Italy), the objective of macroeconomic convergence within the EEC would still be far from being achieved in 1993.

MIMOSA, modèle macroéconomique de l'économie mondiale, construit en commun par le CEPII et l'OFCE est maintenant opérationnel. Le présent article en présente les principales caractéristiques ainsi que quelques propriétés variantielles. Les économies des six plus importants pays industrialisés sont décrites en détail par des modèles d'inspiration néo-keynésienne ; le découpage en cinq branches permet d'isoler l'énergie, le secteur agricole, le secteur abrité, le secteur non-marchand et l'industrie où la fonction de production, de type putty-clay, permet d'assurer la cohérence des comportements d'emploi, d'investissement, d'accumulation de capacités de production. Ces modèles autorisent une analyse fine des diverses mesures de politiques budgétaires ou monétaires. Neufs zones, analysées plus sommairement, regroupent le reste du monde : le modèle intègre en particulier les contraintes de financement qui pèsent sur les possibilités d'importations des pays en développement. Les interdépendances commerciales sont décrites en quatre produits. L'article analyse comment le modèle rend compte des effets différenciés sur l'économie considérée et sur l'économie mondiale d'une hausse des dépenses publiques survenant dans un des grands pays. Il étudie ensuite les conséquences d'une baisse du dollar, puis d'une baisse généralisée des taux d'intérêt. Bien qu'il reste, à certains égards, en construction, le modèle MIMOSA constitue déjà un outil utile pour comprendre le fonctionnement de l'économie mondiale et prévoir son évolution.