Suchergebnisse

The aim of this paper is to investigate the cause behind rising Target2 imbalances since early 2015, coinciding with the implementation of a quantitative easing program by the ECB. Two facts have captured our attention. Firstly, the official explanation of rising Target2 imbalances, offered by the ECB, is not convincing because it does not fit the empirical evidence available for Italy and Spain. Further, our alternative interpretation reveals that through quantitative easing, the ECB has helped to clean up banks? balance sheets and has indirectly funded government spending. Secondly, those who spoke out against the risks of rising Target2 imbalances in 2011-2012, now remain silent on this issue, despite the fact that some of the presumed risks during the first wave of rising imbalances still hold. We interpret this silence as an implicit acceptance that the risks put forward in 2011-2012 are offset by reform fatigue and anti-euro sentiments in the Euro Zone.

Current account imbalances within the eurozone are at the roots of its
economic crisis. We argue that, though relevant, emphasis should shift from
competitiveness to differential rates of growth of domestic demand as its
chief explanatory factor. Euro core countries have experienced a shortage of
domestic demand, with wage restraint playing a key role. This has led them to
experience a current account surplus, which could not be understood
independently of a buoyant domestic demand in the peripheral countries,
funded with private debt. As a byproduct of that strong demand, the periphery
suffered from wage inflation and a loss of competitiveness. This dual growth
pattern is unsustainable as indebtedness cannot go on without any limit.
Neither wage cuts nor fiscal austerity in the periphery will help to solve
this mess: although trade balance would be restored, it would lead to a
negative shock in aggregate demand, threatening their ability to settle debts
at due dates.

pt. 1. The financial side : the burden of debt and the loss of confidence -- pt. 2. The balance of payments constraint : trade deficits as a source of risky debt -- pt. 3. The real side of the economy : the problem of effective demand and the failure of austerity policies.

The 2008-10 financial crisis and the global recession it created is a complex phenomenon that warrants detailed examination. The various essays in this book utilise several alternative paradigms to provide a plausible explanation and a credible cure. Great detail is given to this important analysis from different theoretical perspectives, presenting a clearer understanding of what went wrong and expounding misinterpretations of current theories and practices.

On the one hand, every official document about fiscal policy in Spain, and most orthodox academic papers argue that Spain has no "fiscal space" and that it should apply resolute actions to assure budget consolidation. On the other hand, Spain also had the second highest unemployment rate in the Eurozone in 2015: 21% of the active population. A rapid decline in that rate would require a higher fiscal impulse to sustain higher economic growth rates. This paper addresses this dilemma, presenting two alternative scenarios for the coming years and analyzing their impact on unemployment and fiscal sustainability. The first scenario represents a firm commitment to budget consolidation, while in the second the government uses the fiscal instrument to stimulate domestic demand and ensure a GDP growth rate target. The second scenario is based on an application of an "imperfect" balanced budget multiplier, proposing a combination of discretionary increases in both public expenditure and revenue. The main conclusion is that the end of fiscal austerity is feasible and perfectly compatible with fiscal finances sustainability for Spain.

On the one hand, every official document about fiscal policy in Spain, and most orthodox academic papers argue that Spain has no "fiscal space" and that it should apply resolute actions to assure budget consolidation. On the other hand, Spain also had the second highest unemployment rate in the Eurozone in 2015: 21% of the active population. A rapid decline in that rate would require a higher fiscal impulse to sustain higher economic growth rates. This IMK working paper addresses this dilemma, presenting two alternative scenarios for the next years analyzing their impact on unemployment and fiscal sustainability. The first scenario represents a firm commitment to budget consolidation, while in the second the government uses the fiscal instrument to stimulate domestic demand and ensures a GDP growth rate target. The second scenario is based on an application of an "imperfect" balanced budget multiplier, proposing a combination of discretionary increases in both public expenditure and revenue. The main conclusion is that the end of fiscal austerity is feasible and perfectly compatible with fiscal finances sustainability for Spain. In addition some more general topics are discussed: the difference between the "functional finance" and the "sound finance" approaches to fiscal policy; the possibility of a Balanced Budget expansion; a discussion of the concept of "fiscal space"; and the inadequacy of European fiscal rules. ; Einerseits gehen alle offiziellen Dokumente zur Fiskalpolitik in Spanien und die meisten wissenschaftlichen Veröffentlichungen des ökonomischen Mainstreams davon aus, dass Spanien keinen fiskalischen Spielraum habe und dass das Land entschiedene Maßnahmen ergreifen sollte, um eine Haushaltskonsolidierung sicherzustellen. Andererseits hatte Spanien im Jahr 2015 die zweithöchste Arbeitslosenquote im Euroraum: 21 % der Erwerbspersonen. Eine rasche Rückführung dieser Quote würde einen höheren Fiskalimpuls erfordern, damit höhere Wachstumsraten aufrechterhalten werden können. Das vorliegende Working Paper untersucht dieses Dilemma anhand von zwei alternativen Szenarios für die kommenden Jahre und ihren Auswirkungen auf die Arbeitslosigkeit und die Tragfähigkeit der öffentlichen Finanzen. Das erste Szenario enthält eine feste Verpflichtung zur Haushaltskonsolidierung, während die Regierung im zweiten Szenario mit Hilfe der Fiskalpolitik die Binnennachfrage anregt und dafür sorgt, dass ein vorgegebenes Wachstumsziel erreicht wird. Das zweite Szenario stützt sich auf die Anwendung eines "unvollständigen" Balanced-Budget-Multipliers. Hier wird eine Kombination diskretionärer Erhöhungen von öffentlichen Ausgaben wie Einnahmen angenommen. Das wichtigste Ergebnis ist, dass ein Ende der Austerität möglich und mit einer Tragfähigkeit der öffentlichen Finanzen in Spanien gut vereinbar ist. Darüber hinaus werden einige allgemeinere Fragestellungen diskutiert: der Unterschied zwischen dem "functional finance"-Ansatz und dem "sound finance"-Ansatz in der Fiskalpolitik, die Möglichkeit einer expansiven Fiskalpolitik bei einem ausgeglichenen Haushalt, das Konzept des fiskalischen Spielraums und die Unzulänglichkeiten der europäischen Fiskalregeln.