This European survey examines (a) Europe’s economic growth performance over the last 25 years has been measurably better than it would have been in the absence of the single currency; (b) With euro area member states having given up their ability to carry out independent monetary policy, it is substantially more difficult for them to respond effectively to country-specific macroeconomic disturbances
Keyword: debt sustainability
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This European survey examines (a) Debt sustainability analysis – for example, as practiced currently by the International Monetary Fund – substantially improves the ability to predict future sovereign debt crises; (b) The European Commission’s proposed move from the existing EU fiscal rules to ones based on debt sustainability analysis would be a measurable improvement; (c) A move from the existing fiscal rules to independent fiscal councils would be more effective than a move to rules based on debt sustainability.
This US survey examines (a) Debt sustainability analysis – for example, as practiced currently by the International Monetary Fund – substantially improves the ability to predict future sovereign debt crises; (b) The European Commission’s proposed move from the existing EU fiscal rules to ones based on debt sustainability analysis would be a measurable improvement; (c) A move from the existing fiscal rules to independent fiscal councils would be more effective than a move to rules based on debt sustainability.
This European survey examines (a) Fiscal rules on budget deficits and public debt levels are an essential part of a sound fiscal framework; (b) Since the inception of the Stability and Growth Pact, budget deficits in Europe have been measurably lower, on average, than would have been the case without common budget rules; (c) Since the inception of the Stability and Growth Pact, the path of GDP growth in Europe has been measurably more stable than would have been the case without common budget rules
This US survey examines (a) Fiscal rules on budget deficits and public debt levels are an essential part of a sound fiscal framework; (b) Since the inception of the Stability and Growth Pact, budget deficits in Europe have been measurably lower, on average, than would have been the case without common budget rules; (c) Since the inception of the Stability and Growth Pact, the path of GDP growth in Europe has been measurably more stable than would have been the case without common budget rules
This US survey examines (a) When economic policy-makers are unable to commit credibly in advance to a specific decision rule, they will often follow a poor policy trajectory; (b) Rules-based fiscal policies deliver substantially better outcomes than purely discretionary, on the spot, policy choices.
This Finance survey examines (a) The costs and risks associated with a sharp fall in the value of sterling outweigh any macroeconomic benefits for the UK of export stimulus due to a weaker currency; (b) Concerns about government finances and debt sustainability can undermine the reserve currency status of a major currency
This week’s IGM European Economic Experts Panel statements:
A) Breaking the “doom loop” — a negative spiral that can result when banks hold sovereign bonds and governments bail out banks — would increase the stability of European economies in the event of another financial crisis.
B) Regulators should try to break the doom loop by assigning positive risk weights — in calculating banks’ capital requirements — to banks’ holdings of domestic and other Eurozone sovereign bonds.
C) Breaking the doom loop would impose substantial costs on powerful political constituencies.
This week's IGM European Economic Experts Panel statements:
A) The fiscal rules of the European Union should give more flexibility to member countries.
B) The Italian budget for 2019 that the European Commission rejected in October would have increased Italy’s risk of fiscal insolvency substantially.
C) If France runs a 2019 budget deficit of around 3.4% of GDP, as announced by President Macron’s government, France’s risk of fiscal insolvency will increase substantially.
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