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191. Can Europe deliver growth? The Sapir Report and Beyond

Author:
Jean-Pierre Casey and Jacques Pelkmans
Publication Date:
01-2004
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
The SAPIR report (Sapir et al., 2003) is important for Europe. The justification of and search for higher economic growth in the EU ought to be on the very top of the EU agenda everywhere. Offering a very rich and useful survey of many issues related to European growth, or indeed the lack of it, the report's analysis is insightful and should be compulsory reading for policy-makers and political leaders. Sapir et al.'s policy recommendations are numerous and rightly touch economic as well as institutional aspects at EU level.
Topic:
Economics and International Trade and Finance
Political Geography:
Europe

192. Welfare and the Labour Market in the EU

Author:
Marie-Laure Michaud
Publication Date:
09-2004
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
Over the last two decades, EU institutions have been increasingly concerned with the issues of unemployment reduction and job creation. The EU has recommended that member states develop welfare systems that moderate the negative effects of market relationships on the one hand, and enhance the efficiency of market performance on the other.
Topic:
Economics and Human Welfare
Political Geography:
Europe

193. Are the Balance of Payments Deficits in the Baltic Countries Sustainable?

Author:
Jorgen Drud Hansen and Morten Hansen
Publication Date:
07-2004
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
For almost a decade all three Baltic countries have witnessed substantial deficits on the current accounts of the balance of payments. This paper discusses whether this situation should be a matter of concern. Recent literature on the sustainability of balance of payments deficits is reviewed and put into a Baltic context. The main conclusion is that the recurrent large deficits in the Baltic countries pose a risk for the fixed exchange-rate policies until the countries adopt the euro. In the longer term, large deficits will influence the time path of convergence of living standards between the Baltic countries and the EU as a whole.
Topic:
Development and Economics
Political Geography:
Europe and Eastern Europe

194. Does venture capital investment spur employment growth?

Author:
Ansgar Belke, Rainer Fehn, and Neil Foster
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
Anglo-Saxon countries have been successful in the 1990s concerning labour market performance compared to the former role models of Germany and Japan. This reversal in relative economic performance might be related to idiosyncracies in financial markets, with bank-based financial markets as in Germany and Japan being possibly inferior to stock-market based financial markets in turbulent times and when approaching the economic frontier. A cleavage is related to venture capital markets which are flourishing in Anglo-Saxon but not in German-type financial markets. Venture capital is crucial for financing structural change, new firms and innovations and therefore possibly also nowadays for employment growth.
Topic:
Economics and International Trade and Finance
Political Geography:
Japan, Europe, and Germany

195. Fiscal Policy in the New Open Economy Macroeconomics and Prospects for Fiscal Policy, Coordination

Author:
Leonor Coutinho
Publication Date:
06-2003
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This paper reviews the analysis of fiscal policy in the new open economy macro-economics literature, in view of increasing interest in the question of transmission and coordination of policies across countries, stirred by developments in this literature and by the formation of the euro area. The analysis focuses on two main points: (i) the identification of welfare spillover effects to third countries; and (ii) the assessments made so far of the potential gains from pursuing non-cooperative and cooperative fiscal stabilisation policies. Regarding welfare spillovers, some additional results are derived to examine whether the exchange rate regime (flexible or fixed) matters for the size of these spillovers, and whether the type of policy pursued (balanced-budget or debt-financed) matters. Fixed exchange rates only seem to postpone the costs from the short to the long run, but the type of policy is crucial in determining the welfare impact of fiscal expansions. With respect to policy coordination, attention is drawn to the need to reflect on a potential role for fiscal policy as a stabilisation tool, and on possible interactions between fiscal and monetary policy.
Topic:
Economics and International Political Economy
Political Geography:
Europe

196. The Civil False Claims Act: Using Lincoln's Law to Protect the European Community Budget

Author:
Alan Riley
Publication Date:
11-2003
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
This paper argues that the US Civil False Claims Act of 1986 (hereafter CFCA) could provide the European Community with a means to effectively protect the largely decentralised revenue collection and expenditure of the Community bud get. It also offers a solution to the difficulty of creating an effective means of investigation and penalisation of cross-border fraud without having to create a Community criminal law or a European Public Prosecutor.
Topic:
Economics and International Trade and Finance
Political Geography:
Europe

197. Monetary Policy Rules and the International Monetary Transmission

Author:
Leonor Coutinho
Publication Date:
10-2002
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This paper analyses alternative monetary policy rules for the ECB, using a two "country" model of the euro area and the US, that assumes monopolistic competition, sticky prices and optimizing agents. The alternative rules analyzed for the ECB are ranked by their ability to stabilize consumption, output, and inflation and maximize consumers' welfare. The analysis contributes toward understanding the trade-offs faced by policymakers in open economies and provides some support for the current design of the ECB's operational framework. The results suggest that stabilizing money-growth, in addition to inflation, gives an additional degree of freedom to stabilize output. Although price stability is likely to remain the primary objective of the ECB, monetary policy must "without prejudice of price stability (...) support the general economic policies in the Community..." (Article 2). Hence monitoring money, under certain assumptions about the shocks hitting the economy, may deliver a better outcome in terms of output stabilization which should allow the ECB to fulfill its secondary but nonetheless important commitment.
Topic:
Economics, Government, and International Trade and Finance
Political Geography:
United States

198. Estimating the Effects of Fiscal Policy in OECD Countries

Author:
Roberto Perotti
Publication Date:
10-2002
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This paper studies the effects of fiscal policy on GDP, prices and interest rates in 5 OECD countries, using a structural Vector Autoregression approach. Its main results can be summarized as follows:1 ) The estimated effects of fiscal policy on GDP tend to be small: positive government spending multipliers larger than 1 tend to be the exception; 2) The effects of fiscal policy on GDP and its components have become substantially weaker over time; 3) Under plausible values of the price elasticity, government spending has positive effects on the price level, although usually small; 4) Government spending shocks have significant effects on the nominal and real short interest rate, but of varying signs; 5) In the post-1980 period, net tax shocks have positive short run effects on the nominal interest rate, and typically negative or zero effects on prices; 6) The US is an outlier in many dimensions; responses to fiscal shocks estimated on US data are often not representative of the average OECD country included in this sample.
Topic:
Economics and Government
Political Geography:
United States and Europe

199. Improving the Governance of European Foreign Aid: Development Co-Operation as an Element of Foreign Policy

Author:
Carlos Santiso
Publication Date:
10-2002
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
Should European Union (EU) member states 're-nationalise' foreign aid? Considering the dismal record of the aid managed by the European Commission, this is a legitimate question that European leaders nevertheless seem unwilling to address seriously. Like in America, there is heightened debate across Europe on the purpose of the aid it provides to developing countries. The current debates on poverty reduction, debt relief and, more broadly, the effectiveness of development assistance have brought renewed light on foreign aid.
Topic:
Foreign Policy, Development, and Economics
Political Geography:
America and Europe

200. The Economic Impact of Enlargement on the European Economy: Problems and Perspectives

Author:
Paul Brenton
Publication Date:
10-2002
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
Much of the attention on the economic aspects of the forthcoming enlargement of the EU have concentrated upon the high-profile issues which are linked to the level of relative economic development in the acceding countries; the perceived threat of large-scale migration and the budgetary costs arising from implementation of EU agricultural and regional policies. This paper briefly discusses that these are not insurmountable problems and stresses that the main difficulties from the next enlargement may arise from the effective inclusion of the acceding countries into the Single Market, the microeconomic hub of the EU. We discuss that the process of regulatory harmonisation will become more difficult in an EU of 25 or more members, which entails greater emphasis on the principle of mutual recognition as the main tool for ensuring freedom of movement of goods and services. However, mutual recognition has its limits and is likely to be less effective the more diverse the countries involved.
Topic:
Economics and International Trade and Finance
Political Geography:
Europe