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Reducing institutional rigidities in product and labour markets is key to lowering unemployment. The impact of such labour and product market reforms, however, depends crucially on the country-specific regulatory framework. In this paper, we estimate the country-specific impact of changes in six categories of institutional regulation conditional on the country-specific regulatory environment for a dynamic panel of 26 OECD countries. We overcome existing problems of modelling a large set of institutional interdependencies by applying a model selection approach which is innovative within this literature. In doing so, we provide evidence for the existence of higher-order institutional interdependencies. We further document that especially for changes in employment protection and the unemployment benefit system the impact on unemployment is mixed across countries, thus questioning the relevance of best-practice policies.

The policy report summarizes the research findings of Area 4. It is structured along milestone 80 (WWWforEurope Working Paper Number 4) which provides a broad perspective on governance in Europe. The additional milestones are grouped according to their focus in three groups which make up the distinct sections. The final section gives an outlook how the findings of the various milestones can be used as an input for the policy formulation phase of the project. A central shortcoming of existing governance structures is the weak integration of the (long-term) oriented Europe 2020 strategy in the (more short-term) oriented procedures summarized under the European Semester. A high level of heterogeneity in the EU, the possibility of spillovers caused by national policies, as well as the difficulty of specifying reform needs at the national level call for an adjustment of existing EU governance which is focused less on procedures and rules and more on a case- and country-specific treatment such that the actual needs at both the national and the EU level are taken into consideration.

This book offers the reader a state-of-the-art overview on theory and empirics of business cycle synchronisation, structural reform and economic integration. Focusing on the ongoing integration process in the euro area and the EU, it analyses the integration process that has taken place since the 1980s and which is marked by the advent of the euro and the substantial enlargement that resulted from the accession of 12 new Member States in East and Southern Europe.

Die möglichen Folgen des demografischen Wandels für das Wirtschaftspotential Deutschlands stehen bereits seit einiger Zeit im Fokus von Wissenschaft und Politik. Ein in der politischen Diskussion häufig eingesetztes Argument lautet, dass ein Rückgang der Arbeitskräftebasis das Wachstumspotential eines Landes negativ beeinflusst.

We focus on the influence of institutional variables on business cycle synchronisation for 20 OECD countries from 1979 to 2003. More precisely, this paper derives measures for similarity of institutions and structural reforms, and investigates direct and delayed reform effects on synchronisation by applying robustness tests to a panel data framework with bilateral data. Our findings indicate a strong instantaneous relationship between both similarity of institutions as well as common structural reforms and business cycle correlation.

Despite significant measures to reinforce the EMU's institutional set-up, there is widespread consensus that more needs to be done in order to better deal with cyclical and structural heterogeneity in the EU. Market-based adjustment mechanisms are necessary but not sufficient to advance convergence along more sustainable growth patterns. In that context, institutional reforms advancing integration in the Eurozone are often said to be desirable from an economic point of view, albeit fraught with political difficulties. This paper seeks to provide a fresh outlook on this debate by bringing forward a third, overlooked dimension, namely the feasibility, or 'implementability', of governance reforms. Like national technocracies, the EU faces the risk of failure whereby the creation of institutions or the introduction of new policies do not always bring about the expected outcomes. The paper develops a multi-criteria analytical framework to assess three possible innovations of economic governance: rule-based wage coordination, contractual arrangements for reforms, and a stabilisation fund for the Euro area. The 'robustness' of any proposal seeking to increase the EU's interference into national policy-making should start with a clear economic justification, while taking the dynamics of national preferences into account. However, the risks of moral hazard and institutional barriers should also be systematically internalised in the assessment. After outlining the analytical framework (section 1), the paper assesses the three tentative reforms by using a wide range of data and analyses from existing EU documentation, academic and policy literature, and opinion surveys (sections 2 to 4). Each section ends with some recommendations on the desirable scope and design of reforms. Overall, the three case studies stress the need for a careful and reasoned approach to reforming EU governance. Beyond the predictable clash of economic rationales and political hurdles, reform ideas tend to overlook the difficulties arising at the implementation stage. Diverse wage-setting systems, low administrative capacities, and statistical uncertainty for instance all warn against 'more EU money' or 'EU interference'. The paper, therefore, makes the case for experimental and small-scale innovations and for a much greater engagement of the public in the politics of EU coordination.

Ein in der politischen Diskussion eingesetztes Argument für Maßnahmen der Sicherung der Fachkräftebasis lautet, dass durch fehlende Arbeitskräfte bei einer demografisch bedingt rückläufigen Bevölkerung im erwerbfähigen Alter vorhandene Wachstumspotenziale nicht realisiert werden können. Die Aufgabe der Kurzexpertise ist es, die Wertschöpfungseffekte, die mit einem mehr oder weniger großen Arbeitskräfteangebot bis zum Jahr 2025 verbunden sind, aus makroökonomischer Perspektive zu quantifizieren. Die bei einer größeren Anzahl von Fachkräften erzielte zusätzliche Wertschöpfung kann als Maß für die Wohlfahrtsgewinne dienen, die mit einer Politik zur Sicherung der Fachkräftebasis erzielt werden können. Um die Wertschöpfungspotenziale der Fachkräftesicherung abzuschätzen, werden mit einem makroökonomischen Modell die volkswirtschaftlichen Entwicklungspfade, die sich bei unterschiedlichen Entwicklungen des Arbeitskräfteangebots ergeben, vorausberechnet und verglichen.