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on European Economics |
| By: | Neumann, Dirk; Bargain, Olivier; Dolls, Mathias; Fuest, Clemens; Peichl, Andreas |
| Abstract: | One central lesson of the sovereign debt crisis is that the Eurozone (and the EU) needs institutional reform. Many observers argue that the monetary union should be complemented by a fiscal union . In this paper we provide the first quantitative analysis of important economic effects of an EU income tax. Using the European tax-benefit calculator EUROMOD, we simulate detailed individual budget curves in order to estimate an average EU tax system . Three key issues are analyzed: firstly, we assess the direct distributional implications of an EU tax (partly) replacing national tax systems. Applying different voting schemes, we especially investigate whether such a step could find political support in each country and the EU as a whole. Secondly, by using behavioral simulation techniques we analyze the impact of introducing a common tax on economic efficiency and adjust the distributional effects accordingly. Thirdly, we investigate the potential of an EU income tax to act as an automatic fiscal stabilizer in the event of an asymmetric shock. We derive crucial policy implications from our simulation exercise for the reform of the Eurozone and shed some light on a very important set of questions: How would further fiscal integration economically affect different households in the different member states? How would it affect automatic stabilizers in the EU? -- |
| JEL: | H20 H31 J22 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:66063&r=eec |
| By: | Martin Feldstein |
| Abstract: | This paper examines the sources of current conflict within the EU and the EMU. The topics discussed include the recent ECB policy of bond buying (the OMT policy), the attempts to advance the "European Project" of stronger political union (the fiscal compact, the banking union, and the proposals for budget supervision). Contrary to the claims of the European leadership, the progress that has been made has been by individual countries and not by coordinated action. The special problems of France and Britain are also discussed. |
| JEL: | F0 F02 F15 F3 F4 F5 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18672&r=eec |
| By: | Daniel Dias; Carlos Robalo Marques; Fernando Martins |
| Abstract: | This paper discusses the identification of the determinants of downward wage rigidity and provides new empirical evidence concerning its importance in Europe. It is shown that the models estimated so far in the literature suffer from econometric problems that prevent the contributions of those determinants to be correctly identified or precisely estimated. An empirical exercise, along the lines discussed in this paper, using survey data for 15 European Union countries, shows that the results may significantly differ from the ones previously obtained in the literature. Together, the theoretical considerations and the estimated results suggest that new empirical evidence is required before definite conclusions on the determinants of downward nominal or real wage rigidity can be drawn. |
| JEL: | C31 J31 J50 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ptu:wpaper:w201215&r=eec |
| By: | Kolev, Galina |
| Abstract: | In 1976 Vaubel suggested using the variation of real exchange rates when evaluating the desirability of a monetary union within a group of currencies (Vaubel 1976). Currency uni cation is less desirable, the more often real exchange rate adjustments are needed. Ten years later, Mussa reconsidered the high correlation between nominal and real exchange rate movements and presumed predominant influence of transitory factors on the development of real exchange rates (Mussa 1986). The implementation of the real exchange rate criterion for the viability of countries to form a monetary union a ords therefore to isolate the real exchange rate variation which is not caused by short-lived shocks to nominal exchange rates. Using the methodology introduced by Blanchard and Quah (1989), the present analysis examines the contribution of temporary and permanent shocks to the variation of real and nominal exchange rates among European countries. Imposing the restriction that temporary shocks should not a ect the real exchange rate in the long run, the analysis indicates that in most of the EU-15 countries the nominal exchange rate exibility has been used as a means to ful ll real exchange rate adjustments before 1999. Based on the results the most viable monetary union should be between Germany, Luxembourg, and France. Futher on, the empirical analysis applies the real exchange rate criterion to the Eastern enlargement of EMU and shows that giving up the nominal exchange rate exibility will be the most painful for Hungary and Poland. -- |
| JEL: | F41 F33 F15 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:66061&r=eec |
| By: | Dimitra Petropoulou (Department of Economics, University of Sussex, Brighton, United Kingdom); Xavier Cirera (Institute of Development Studies, University of Sussex, Brighton, United Kingdom); Dirk Willenbockel (Institute of Development Studies, University of Sussex, Brighton, United Kingdom) |
| Abstract: | This paper analyses the determinants of outward processing (OP) trade; specifically, imports of intermediates subsequent to processing abroad. A model where firms choose between OP and importing intermediates directly from a third country (generic offshoring, GO) predicts higher tariffs, lower monitoring costs and higher quality make OP more likely, while better institutions and rule of law abroad lower contractual breakdown risk under GO making OP less likely. Analysis of EU trade data from 2002 to 2008 emphasizes proximity, quality differentiation and weaker rule of law as OP determinants. Results suggest relationship-specific investments and monitoring under OP may offset contractual uncertainty. |
| Keywords: | Outward processing, offshoring, European Union |
| JEL: | F14 D23 L23 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:sus:susewp:5413&r=eec |
| By: | Pedro Abrantes; Manuel Abrantes |
| Abstract: | Education is reasonably expected to enhance intergenerational social mobility. However, the extent to which educational systems foster or otherwise constrain social mobility remains controversial. In this paper, data from the European Social Survey covering 22 countries is analysed in order to assess social mobility in the second half of the 20th Century. Variation across five cohesive regional clusters is examined in detail. Results confirm increasing rates of social mobility in Europe and their close relation to massive structural shifts. The erosion of the education-occupation linkage presents a current threat to this trend. Considering formal credentials only, the most equalitarian educational systems are to be found in the United Kingdom and Ireland, but their ability to allocate individuals in the occupational structure is lower than in the other regions. Scandinavian systems show higher chances of social mobility through education, while Mediterranean systems present lower fluidity rates in both the background-education link (like Eastern European countries) and the education-occupation link (like the UK & Ireland). Gender and migration are identified as key factors to explain these differences. |
| Keywords: | education, educational systems, gender, migration, social mobility |
| JEL: | I24 J21 J70 Y10 Z13 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:soc:wpaper:wp012012&r=eec |