Monetary policy in the euro area
In: Journal of post-Keynesian economics, Band 28, Heft 3, S. 371-394
ISSN: 1557-7821
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In: Journal of post-Keynesian economics, Band 28, Heft 3, S. 371-394
ISSN: 1557-7821
In: Public Policy for Regional Development; Routledge Studies in Global Competition, S. 11-27
In: Monetary Policy, Fiscal Policies and Labour Markets, S. 59-88
With a unique data set summarizing the quality of rules-based fiscal governance in EU member states, we show that stronger fiscal rules in euro area members reduce sovereign risk premia, in particular in times of market stress. To do so, we develop a model of sovereign spreads that are determined by the probability of default in interaction with the level of risk aversion. Estimation of the model con firms the central predictions. The legal base of the rules and their enforcement mechanisms are the most important dimensions of rules-based fiscal governance.
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In: ECB Working Paper No. 2023/2815
SSRN
In: National Institute economic review: journal of the National Institute of Economic and Social Research, Band 233, S. F44-F52
ISSN: 1741-3036
In: Journal of monetary economics, Band 108, S. 162-179
SSRN
In: ECB Working Paper No. 2281 (2019); ISBN 978-92-899-3543-2
SSRN
In: CEPR Discussion Paper No. DP13759
SSRN
Working paper
The 2008 crisis led to a strong rise in public deficits and debts in most developed economies. These debts and deficits are currently Keynesian (i.e. required for macroeconomic stabilisation), as shown by low inflation and interest rates levels. Euro area public debts are not guaranteed by a lender of last resort. The rules enshrined in the Stability Pact and the Fiscal Treaty have no economic basis. The paper discusses federalist proposals such as a European Debt Agency or a European Treasury, and unconventional solutions, such as debt monetisation, buyback by the ECB, and even debt cancellation. It concludes in advocating for a rule-free economic policy coordination.
BASE
The 2008 crisis led to a strong rise in public deficits and debts in most developed economies. These debts and deficits are currently Keynesian (i.e. required for macroeconomic stabilisation), as shown by low inflation and interest rates levels. Euro area public debts are not guaranteed by a lender of last resort. The rules enshrined in the Stability Pact and the Fiscal Treaty have no economic basis. The paper discusses federalist proposals such as a European Debt Agency or a European Treasury, and unconventional solutions, such as debt monetisation, buyback by the ECB, and even debt cancellation. It concludes in advocating for a rule-free economic policy coordination.
BASE