Journal ArticleDOI
Toward a Mutualization of European Unemployment Insurance? On Limiting the Downsides of a Fiscal Transfer System for the Eurozone
TLDR
In this article, the authors discuss the potential trade-offs between effectiveness, moral hazard problems, and permanent redistribution, and propose that a clearly defined exit option as a guarantee against involuntary redistribution can make entry into a stronger fiscal union less risky and hence more attractive for member states.Abstract:
There is a large, yet growing debate about the need to complement the European monetary union with a stronger fiscal union. This article reviews the potential trade-offs between effectiveness, moral hazard problems, and permanent redistribution. Addressing the counter-arguments against a tighter fiscal union is essential to overcome the political reluctance in some member states that are concerned about large amounts of redistribution. We discuss clawback mechanisms that have been suggested in the literature as a measure to limit redistribution, but conclude that clawbacks are undesirable, as they would essentially destroy the insurance value of a fiscal union. Instead, we propose that a clearly defined exit option as a guarantee against involuntary redistribution can make entry into a stronger fiscal union less risky and hence more attractive for member states.read more
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Posted Content
Flexicurity – Labour Market Performance in Denmark
TL;DR: In this paper, the authors argue that the workfare policies have played an important role running primarily via motivation/threat and wage effects, and although workfare reforms have improved cost effectiveness, there is still an issue as to whether the resources going into active labour market policies are used efficiently.
Book
Revisiting the Economic Case for Fiscal Union in the Euro Area
TL;DR: In this article, the authors make an analytical contribution to the ongoing discussion about the euro area's institutional setup, and suggest the need for long-run progress along three mutually supportive tracks.
Posted ContentDOI
A euro area macroeconomic stabilisation function: Assessing options in view of their redistribution and stabilisation properties
TL;DR: In this article, a broad range of options, their impact on economic growth, macroeconomic stabilisation and synchronisation of the euro area business cycle, and review how they could be designed so they do not undermine incentives for welfare-enhancing national economic policies.
Journal ArticleDOI
European unemployment insurance. From undercurrent to paradigm shift
TL;DR: The need for the European Union to get involved in unemployment insurance has frequently been debated in the past decade, starting from exploratory discussions and eventually becoming a political commitment by the European Commission President as mentioned in this paper .
Journal ArticleDOI
Horizontal Transfers and Consumption Smoothing in a Monetary Union
Werner Roeger,Lukas Vogel +1 more
TL;DR: In this paper, the authors investigated the impact of automatic horizontal fiscal transfers on risk sharing and consumption smoothing in a 2-country DSGE model of monetary union and used the Asdrubali et al. (1996) approach to quantify and decompose the strength of consumption smoothed.
References
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Fiscal Policy in General Equilibrium
Marianne Baxter,Robert G. King +1 more
TL;DR: In this paper, the authors studied four classic macroeconomic experiments within a quantitatively restricted neoclassical model and found that permanent changes in government purchases can lead to short-run and long-run output multipliers that exceed one.
ReportDOI
Why Are Stabilizations Delayed
Alberto Alesina,Allan Drazen +1 more
TL;DR: In this paper, the authors solve for the expected time of stabilization in a model of "rational" delay and relate it to several political and economic variables, and motivate this approach and its results by comparison to historical and current episodes.
Book ChapterDOI
Understanding Economic Policy Reform
TL;DR: The authors discusses the state of our knowledge on the political economy of this process and discusses the helpful rules for reformers to follow in guiding their policies through complicated political terrain, and suggest that reformers internalize the correct lessons from the East Asian experience.
Book
Solutions manual for Microeconomic theory : Mas-Colell, Whinston and Green
TL;DR: A Solutions Manual, containing solutions to all end-of chapter questions for MICROECONOMic Theory by Mas-Colell, Whinston and Green, is released.
Book
Economics of Monetary Union
TL;DR: In this article, the authors compare the costs and benefits of a common currency in the European Union and Latin America with respect to the Euro and the United Kingdom's transition to a monetary union.