Arbeitspapier
Structural Reforms and Stabilization Policies in the Euro Area
Specifying a structurally built NKM model for EMU, and identifying in it the determinants of the potential output and the short-run cyclical factors, we consider structural reforms and monetary and fiscal policies in the euro area. Especially, we analyse whether structural reforms are deflationary or boost the economy in the short run and create spillovers within the euro area under the zero lower bound (ZLB) of the interest rate. We find that a structural reform towards a more competitive economy by lowering the mark ups in the goods and labour market is beneficial both in the short and long run, and both under normal and the ZLB situation in the financial markets. Coordination of reforms within the euro area is also called for, because the spillovers from reforms are typically negative. The national governments searching for an optimal structural policy can delegate the stabilization efforts to the ECB in a long-run equilibrium, but in the short run this separation does not hold in general. We find that in a recession the reform policy is typically curtailed, while in a boom it initially exceeds the long-run equilibrium of reform activity. Proper fiscal policy can alleviate this problematic feature in structural reform policies.
- Sprache
-
Englisch
- Erschienen in
-
Series: ETLA Working Papers ; No. 31
- Klassifikation
-
Wirtschaft
Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
Policy Objectives; Policy Designs and Consistency; Policy Coordination
International Policy Coordination and Transmission
- Thema
-
structural reform
EMU
coordination
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Alho, Kari E.O.
- Ereignis
-
Veröffentlichung
- (wer)
-
The Research Institute of the Finnish Economy (ETLA)
- (wo)
-
Helsinki
- (wann)
-
2015
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Alho, Kari E.O.
- The Research Institute of the Finnish Economy (ETLA)
Entstanden
- 2015
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