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on European Economics |
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Issue of 2024‒07‒15
58 papers chosen by Simon Sosvilla-Rivero, Instituto Complutense de Análisis Económico |
| By: | Nicolas Veron (Peterson Institute for International Economics) |
| Abstract: | Europe's banking union, the project to pool responsibility for prudential policy at the European Union level, became a reality in 2014 with the empowerment of the European Central Bank (ECB) as banking supervisor. Ten years on, the project remains unfinished, as European countries can still leverage their domestic banking sectors to serve their special interests, and the intervention framework for banking crises continues to be an awkward mix of national and EU authorities and instruments. But the achievements of even this incomplete banking union have been impressive. The decision on ECB banking supervision, made in mid-2012, was crucial for the eventual resolution of the euro area crisis. The subsequent decade of supervisory practice appears to have been successful, meeting its objectives of banking system safety and soundness. Still, Europe pays a high price for its reluctance to finish the work. This paper offers a comprehensive exploration of the genesis, implementation, and possible future completion of this major policy endeavor. |
| Keywords: | Banking union, European Union, European Central Bank, Euro area |
| JEL: | G28 N24 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:iie:wpaper:wp24-15&r= |
| By: | Baumann, Ursel (European Central Bank); Ferrando, Annalisa (European Central Bank); Georgarakos, Dimitris (European Central Bank); Gorodnichenko, Yuriy (University of California, Berkeley); Reinelt, Timo (European Central Bank) |
| Abstract: | This paper provides new survey evidence on firms' inflation expectations in the euro area. Building on the ECB's Survey on the Access to Finance of Enterprises (SAFE), we introduce consistent measurement of inflation expectations across countries and shed new light on the properties and causal effects of these expectations. We find considerable heterogeneity in firms' inflation expectations and show that firms disagree about future inflation more than professional forecasters but less than households. We document that differences in firms' demographics, firms' choices and constraints, and cross-country macroeconomic environments account for most of the variation in inflation expectations by roughly equal shares. Using an RCT approach, we show that firms update their inflation expectations in a Bayesian manner. Moreover, they revise their plans regarding prices, wages, costs and employment in response to information treatments about current or future inflation. |
| Keywords: | inflation expectations, firm decisions, price setting, surveys, randomised controlled trial |
| JEL: | E20 E31 E52 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17015&r= |
| By: | Ampudia, Miguel; Lombardi, Marco Jacopo; Renault, Théodore |
| Abstract: | This paper studies the pass-through from wages to producer prices using sectoral disaggregated data for the euro area. We find a positive and statistically significant wage-price pass-through that reaches 50% after three years, which differs across sectors. The wage-price pass-through in private servicesis significantly higher than in industry and takes longer before reaching its peak. While a higher labour intensity is a key component of the pass-through, our estimates indicate that differences in sectoral labour shares alone cannot explain the larger wage-price pass-through in private services compared to industry. Instead, the estimates hint at an important role for international competition in the domestic market for the tradeable sector. They also suggest that the sales destination matters: wage growth contributes to domestic inflation for goods but not to export inflation. Finally, we also provide evidence of an increase in the wage-price pass-through after 2020, particularly in private services. JEL Classification: E24, E31 |
| Keywords: | inflation dynamics, international competition, sectors, wage-price pass-through |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20242948&r= |
| By: | Daniel Alonso (Banco de España) |
| Abstract: | To moderate the falls in production and income that affect certain states or regions, countries and monetary unions have risk-sharing mechanisms. These mechanisms work by stabilising household incomes such that fluctuations in production do not filter through to consumption. Almost all existing monetary unions are true insurance unions, except for the euro area. This entails lower resilience to economic shocks and, as demonstrated during the COVID-19 crisis, implies that the ability to respond to different shocks may differ between countries and, therefore, hinder economic convergence and homogeneous operation of the euro area. In this regard, the creation of a European Unemployment Insurance (EUI) scheme is often cited as an important step towards macroeconomic smoothing within the euro area that could help mitigate the economic and social impact of large economic shocks. In this paper, I propose an EUI scheme, with partial coverage, calibrated to the characteristics of the Temporary Support to Mitigate Unemployment Risks in an Emergency (SURE scheme) introduced during the COVID-19 crisis, and test its cyclical properties through simulation exercises, based on the payment and contribution flows in each country. This paper shows that such a transfer system with a relatively limited size could make a significant contribution to stabilising economic developments, cushioning part of the disruptions in times of crisis. |
| Keywords: | macroeconomic stabilisation, monetary union, unemployment insurance, risk-sharing |
| JEL: | F45 E63 E62 E24 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:bde:wpaper:2419&r= |
| By: | Milan Výškrabka; Erza Aruqaj |
| Abstract: | After a decade-long period of surpluses, soaring energy prices sent the euro area current account into a deficit in 2022. This occurred against the backdrop of a lingering COVID-19 impact, and in parallel with gradual recovery of the tourism sector. After its strong fall, the euro area current account balance has been on an improving path this year, as energy prices have fallen from their 2022 highs, and assisted somewhat by a small but visible reduction in the volume of net energy imports. However, energy prices are expected to remain above their pre-pandemic levels exerting a continuous downward pressure on energy balances in the medium term. The asymmetric nature of these shocks caused current account balances to widen across the globe over the past three years, undoing the narrowing that had previously been underway. The fading of these shocks will affect the normalisation of current accounts worldwide and in the euro area and may result in a changed landscape going forward. This paper reviews recent developments in the euro area external position, discusses the main drivers and provides some insights into the likely determinants of the external position in the near term. |
| JEL: | F45 F62 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:euf:dispap:202&r= |
| By: | Luis García; Alexander Leodolter; Alessandro Turrini |
| Abstract: | National Productivity Boards (NPBs) aim to foster debate relating to productivity and competitiveness and enhance policy making in these areas. In 2016, the Council of the European Union called on all euro area Member States to set up an NPB with characteristics such as independence and capacity to carry out high-quality analyses. The non-euro area Member States were also encouraged to establish similar bodies. More than seven years after the adoption of the NPB recommendation, the network of NPBs is well established. Through the annual reports, NPBs discuss productivity trends, productivity drivers and policies as well as economic developments with an impact on productivity and competitiveness. In most cases, NPB characteristics are broadly in line with those of the recommendation. However, not all EU Member States have an NPB in place and there are considerable differences in NPBs’ institutional design, capacity, and involvement in policy making. This paper updates the assessment made in the 2019 and 2021 European Commission progress reports on the implementation of the NPB recommendation. It also identifies gaps with respect to additional criteria for NPB effectiveness found in the existing literature, this being its main novelty. Findings suggest that NPBs would especially benefit from stronger provisions to guarantee independence and adequate resources and from practices boosting their participation in domestic policy making. |
| JEL: | E02 E60 O40 O43 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:euf:dispap:203&r= |
| By: | Kerssenfischer, Mark; Helmus, Caspar |
| Abstract: | We use outages as natural experiments to study sovereign bond market functioning. When the euro area futures market goes down, trading activity on the cash market declines, liquidity evaporates, and transaction prices deviate from fundamental values. Tracing back this macrolevel market breakdown to the micro-level, we show that particularly dealers withdraw from the cash market during outages. While most of their remaining trades remain fairly priced, dealer’s capacity to intermediate trades on the cash market is reduced, forcing more clients to trade directly with each other, leading to substantial mispricing. Lastly, outages on cash trading venues barely affect the futures market, suggesting that price formation and liquidity provision is a one-way street, and outages on the US and euro area futures market barely affect each other, in stark contrast to the significant price spillovers. Our results reveal the trade-offs between a (de)centralized market structure, they support cross-asset learning models to explain the link between liquidity and arbitrage, and they demonstrate how financial intermediaries can impose important limits to arbitrage. JEL Classification: G12, G14, G23 |
| Keywords: | market microstructure, natural experiment, yield curve |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20242944&r= |
| By: | Michele Azzone; Roberto Baviera; Pietro Manzoni |
| Abstract: | A growing number of contributions in the literature have identified a puzzle in the European carbon allowance (EUA) market. Specifically, a persistent cost-of-carry spread (C-spread) over the risk-free rate has been observed. We are the first to explain the anomalous C-spread with the credit spread of the corporates involved in the emission trading scheme. We obtain statistical evidence that the C-spread is cointegrated with both this credit spread and the risk-free interest rate. This finding has a relevant policy implication: the most effective solution to solve the market anomaly is including the EUA in the list of European Central Bank eligible collateral for refinancing operations. This change in the ECB monetary policy operations would greatly benefit the carbon market and the EU green transition. |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.12982&r= |
| By: | Richard Grieveson (The Vienna Institute for International Economic Studies, wiiw); Mario Holzner (The Vienna Institute for International Economic Studies, wiiw); Thomas Wieser |
| Abstract: | We discuss past performance and future challenges for the countries of Central and Eastern Europe (CEE). We highlight the successful convergence process of those countries, not least thanks to their integration into European and global value chains. As the external environment changes, so policies must change in order to maintain the momentum. A strong European Union also presupposes a strong and vibrant CEE. The policy recommendations in the areas we have covered in this contribution include national reform programmes that promote innovation, competitiveness, and transparent institutions; a larger EU budget for European public goods; shadow policies for euro accession by CEE non-euro economies; accession to the banking union by CEE non-euro countries; deepening of home/host cooperation with the assistance of the European Banking Authority to enable freer movement of capital; high-quality implementation of anti-money-laundering processes and institutions; promotion of regional cooperation in areas such as withholding tax, convergence of rules on accounting and stock exchanges in support of a regional capital market; promotion of deeper national capital markets by boosting the second and third pillars of pension systems, while retaining their pay-as-you-go systems; regional cooperation among venture capital funds, supported by the European Investment Fund; investment in science, technology, engineering, and mathematics (STEM) education and establishment of a leading university to retain talent and foster innovation; implementation of a modern industrial policy promoting infrastructure and know-how for the green and digital transformation; mitigating the demographic challenges will require a mixture of automation, greater immigration and higher participation rates; promotion of a high degree of flexibility in labour markets, in order to facilitate shifts away from sectors that are adversely impacted by the twin transition, and towards more innovative activities; education and training programs for sectors where wage convergence has made most progress, including promotion of labour mobility within CEE to overcome sectoral bottlenecks; provision of family-friendly infrastructure to encourage citizens to remain in their home countries and encourage return migration. |
| Keywords: | European integration, economic convergence, Central and Eastern Europe, European Union, Euro Area, growth model, financial markets |
| JEL: | E22 E24 F15 F21 F36 G24 H54 J24 O16 O47 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:wii:pnotes:pn:79&r= |
| By: | Meryem Gökten (The Vienna Institute for International Economic Studies, wiiw); Sebastian Leitner (The Vienna Institute for International Economic Studies, wiiw); Jan Muś; Stella Sophie Zilian (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Chart of the Month Austria in pole position to benefit from artificial intelligence by Stella Zilian Opinion Corner ‘Multi-speed Europe’ The Franco-German road to disaster by Jan Muś The ‘multi-speed Europe’ expert proposal commissioned by France and Germany has outlined the institutional and procedural reforms that the EU would need to implement, in order to prepare for future enlargement. While individual elements of the proposal make perfect sense, collectively they could potentially be disastrous, given the current international climate. By excessively strengthening the leverage of ‘core’ member states – such as France and Germany – over the rest of the EU, their implementation could result in a deepening of the EU’s internal divide between the poor and the rich. How far from full employment? The European unemployment problem revisited by Meryem Gökten Using the Beveridge curve concept, we find that European countries last experienced full employment in the 1970s, with the subsequent decades marked by elevated unemployment. After the COVID-19 crisis, only a few EU member states (such as the Netherlands and Czechia) and the US have achieved full employment; most EU member states still have considerable labour-market slack. Among other things, our analysis highlights the contribution made by hysteresis effects, trade union density and right-wing government policies to greater labour-market slack, and suggests there is no trade-off between inflation and unemployment – whatever the classical Phillips curve suggests. The EU minimum wage directive A chance for decent earnings in EU-CEE by Sebastian Leitner Collective bargaining in EU-CEE has been under pressure over the past two decades, with coverage rates much lower nowadays than in Western and Northern European countries. Moreover, in-work poverty and wage dispersion have been on the rise. The EU Minimum Wage Directive, adopted in late 2022, is an important step forward in addressing these problems, by promoting collective bargaining and increasing statutory minimum wages. However, its success will ultimately depend on the willingness of national governments to accept unions and employer organisations as equal partners and to respect their autonomy in wage setting. Monthly and quarterly statistics for Central, East and Southeast Europe |
| Keywords: | artificial intelligence, digital devices, complex cognitive tasks, EU institutions, majority voting, EU enlargement, full employment gap, Beveridge curve, Phillips curve, minimum wage, collective bargaining, in-work poverty |
| Date: | 2023–12 |
| URL: | https://d.repec.org/n?u=RePEc:wii:mpaper:mr:2023-12&r= |
| By: | Ádám Kerényi (Institute of World Economics, HUN-REN Centre for Economic and Regional Studies); Csaba Lakócai (Institute of World Economics, HUN-REN Centre for Economic and Regional Studies) |
| Abstract: | Following the collapse of the Soviet-style planned economies, the post-socialist region of Central and Eastern Europe has undergone a process of economic convergence after the initial shock of transition to a market economy. One stage in this process was accession to the European Union. Most of the countries in the region became members, making them eligible for further benefits and financial allocations. The extent to which these funds have been used effectively over the past decades varies from country to country, but overall, the convergence of these countries within the EU has continued. In this study, we examine the distribution of the net EU transfers to the post-socialist member states and their impact on macroeconomic and social indicators between 2004 and 2022. While these effects are clearly visible in terms of the formal economic and consumption indicators, they are less directly visible in terms of the informal wellbeing trends. |
| Keywords: | European Union, post-socialist countries, Central and Eastern Europe, financial transfers, convergence |
| JEL: | I31 O47 O52 P20 P27 Y10 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:iwe:workpr:274&r= |
| By: | Lalinsky, Tibor; Meriküll, Jaanika; Lopez-Garcia, Paloma |
| Abstract: | This paper studies how the Covid-19 pandemic and the extensive job retention support that accompanied it affected productivity in Europe. The focus is on the reallocation channel and productivity-enhancing reallocation of jobs, following Foster et al., 2016. An extensive micro-distributed analysis of firm-level data for 11 euro area countries is used. The unique firm-level datasets are constructed by merging balance-sheet and income-statement data with policy support data. The paper exploits variation in employment responsiveness to productivity over time, particularly examining the relationship between changes in employment responsiveness and the job retention support in 2020 and studying how well the support was targeted by firm productivity. Acknowledging limitations of a small set of countries covered and occasionally large confidence bounds around estimates, the findings suggest that (1) productivity-enhancing reallocation was weaker in the pandemic than in the Great Recession; (2) The countries that were more generous with job retention support and countries where more support was allocated to low-productivity firms showed weaker productivity-enhancing reallocation in 2020. JEL Classification: D22, H25, J38, L29 |
| Keywords: | adjustment of firms, Covid-19, cross-country analysis, job retention support, productivity-enhancing reallocation |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20242947&r= |
| By: | Maryna Tverdostup (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Over the past few decades, immigration has become the primary factor contributing to population growth in the European Union (EU) due to rapid population ageing and declining fertility rates. However, the traditional migration source countries – namely, the EU countries in Central and East Europe (EU-CEE) and the EU neighbourhood countries – have limited potential to supply much-needed labour to Western Europe due to own their grim population prospects. Immigration from non-EU, non-European Free Trade Association (EFTA) or non-EU candidate countries as of 2015 (i.e. Georgia, Moldova, Turkey and Ukraine) appears to be the only factor that can prevent population decline in the long run, as third-country nationals are, on average, younger than natives or immigrants from the EU neighbourhood. However, current evidence suggests that higher immigration has only a limited capacity to stabilise population decline and offset labour shortages in the EU countries most affected by negative demographic trends, as they receive fewer immigrants relative to other EU countries. Moreover, the labour market integration of immigrants from non-traditional source countries, including Middle Eastern and African countries, has proved challenging for both legal and infrastructural reasons. This has resulted in an immense pool of untapped talent and skills, which will require the appropriate policy steps to be fully identified and effectively employed in the labour market. These policies, like the ones proposed in this report, will become increasingly important as the EU moves steadily towards new immigration source regions. |
| Keywords: | demographic trends, labour shortages, migration, refugees, integration policies |
| JEL: | J11 J15 O15 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:wii:pnotes:pn:78&r= |
| By: | Aleksandr Arsenev (The Vienna Institute for International Economic Studies, wiiw); Meryem Gökten (The Vienna Institute for International Economic Studies, wiiw); Philipp Heimberger (The Vienna Institute for International Economic Studies, wiiw); Andreas Lichtenberger (The Vienna Institute for International Economic Studies, wiiw); Bernhard Schütz (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | This paper analyses (age-adjusted) employment rates by gender and education. We find that male female gender gaps and high-low education gaps in employment vary markedly across European Union (EU) countries and regions, with larger gaps existing in Eastern and Southern Europe than in Nordic and Continental EU countries. We estimate that closing existing education gaps in employment between high and lower education levels would raise the employment rate in the EU for the year 2022 by 10.6 percentage points, whereas closing the gender gaps between men and women would lead to an increase of 2.5 percentage points. At the same time, closing both the gender and education gaps would raise the EU employment rate from 76% to 89% of the population. Furthermore, we provide new evidence on the cyclical behaviour of employment gaps, finding that gender gaps are procyclical. While female employment rates tend to be more resilient than male employment rates during economic downturns, male employment rates tend to grow at a faster pace than female employment rates during upswings. In contrast, education gaps are more countercyclical, as employment risks are more strongly concentrated where education is low. |
| Keywords: | Full employment, unemployment, employment gaps, gender, education, EU, business cycle |
| JEL: | E24 E32 E6 J63 J64 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:wii:wpaper:251&r= |
| By: | Bettina Meinhart |
| Abstract: | This paper examines the impact of membership in the European Union on foreign direct investments (FDI). In contrast to previous studies, the overall effect of EU membership is disaggregated by countries that joined the EU before 2004 (EU15) and those that joined after 2004 (CEE). This disaggregation is motivated by differences between the two groups in terms of their historical background, GDP levels, and motives for FDI. Furthermore, the effects of EU membership are estimated at the country level. Using a structural FDI gravity model and applying recent advances in the gravity estimation literature, it is shown that membership of the EU has a substantial positive impact on both inward and outward FDI stocks. In particular, there is considerable heterogeneity in the impact of EU membership, with EU15 countries experiencing mainly an increase in inward FDI, while CEE countries experience a surge in outward FDI. |
| Keywords: | Foreign Direct Investments, Structural Gravity Model, Europian Union membership |
| JEL: | F21 F36 O52 C33 |
| URL: | https://d.repec.org/n?u=RePEc:wsr:wpaper:y:2023:m:10:i:197&r= |
| By: | Nonnis, Alberto; Roth, Felix; Bounfour, Ahmed |
| Abstract: | This paper presents a puzzling finding: although France invests twice as much in intangible capital vis-à-vis Germany, both countries have similar LPG rates over the studied period from 1995 until 2020. We find that this difference in investments is driven by France's four- and two-and-a-half-fold investments in software and organizational capital. Our paper offers three perspectives to clarify the puzzle. First, higher investments in intangible capital in France might suggest a better readiness of the country towards the next generation of investment. However, France's investments in intangibles appear to be less efficient compared to those of Germany. Third, measurement problems in the software and organizational capital investment series are also to be considered to understand this major puzzle. |
| Keywords: | Intangible capital, Labour Productivity, Germany, France, EU |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:uhhhdp:16&r= |
| By: | Hervé Alexandre (DRM, CNRS, [UMR 7088], Université Paris-Dauphine, PSL, Place du Maréchal de Lattre de Tassigny 75775 PARIS Cedex 16;); Catherine Refait-Alexandre (Université de Franche-Comté, CRESE, F-25000 Besançon, France); Larry D. Wall (Research Department, Federal Reserve Bank of Atlanta, 1000 Peachtree Street N.E, Atlanta, Georgia 30309-4470, USA) |
| Abstract: | The Fed operated various liquidity facilities during 2007-10 that were intended to alleviate financial system stress but could have been interpreted as an adverse signal. We analyze the response of the credit default swap market to the announcement and usage of these facilities by European banks. We find that Fed financial assistance tended to reduce market perception of risk if the information was related to Fed’s liquidity policies and increased risk perceptions when the information was more about banks’ riskiness. We also find the facilities reduced the perceived risk of publicly assisted banks but increased the perceived risk of banks that were not assisted. |
| Keywords: | Financial crisis, Federal Reserve lending facilities, European banks. |
| JEL: | E58 G21 G28 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:crb:wpaper:2024-12&r= |
| By: | Vanessa Kunzmann |
| Abstract: | I estimate regime-dependent spillover effects from government spending shocks across the members of the European Monetary Union (EMU). I use panel regressions for a total of 14 EMU economies from 1997 to 2022. Government spending shocks are defined by unexpected innovations to forecast predictions of government purchases, similar to Auerbach and Gorodnichenko (2013). However, In contrast to business cycle dependence, I investigate the quantitative impact of different fiscal policy regimes of the targeted country, the country of origin, and the monetary union on the spillover multipliers. Thereby, I allow fiscal and monetary policy to follow a two- state Markov Switching process characterizing an active and a passive regime as in Leeper (1991). Thus, governments differ in their debt reduction efforts to satisfy their budget constraint and monetary policy varies between inflation targeting and restrained price level determination. I find that spillover multipliers are highly regime-dependent, with positive and significant effects when the targeted country is active and the country of origin is passive. These effects are consistent but even larger for members with a high level of debt. However, results suggest that the importance of union-wide fiscal behavior and that of the central bank matters more for highly indebted countries. Thus, the interest rate channel is gaining relevance when debt is high. (JEL: F41;F42;F45; E62; C23) |
| Keywords: | Fiscal Policy; Fiscal Spillovers; Fiscal Multiplier; Multiplier; European Monetary Union; Regime Switching; Fiscal Policy Rules, Monetary-Fiscal Interaction |
| Date: | 2023–08 |
| URL: | https://d.repec.org/n?u=RePEc:bav:wpaper:227_kunzmann&r= |
| By: | István Benczes (Institute of World Economics, HUN-REN Centre for Economic and Regional Studies) |
| Abstract: | The eight new member states that joined in 2004, followed by three more in Central and Eastern Europe, have achieved a significant degree of convergence in terms of economic development. In the present study, however, we examine whether the size of public finances in the 11 CEE new member states has also approached the EU average, and to what extent the structure of public expenditures and revenues in these countries show similar or different patterns to that of the EU27. The distinction between the size and composition of public finances is rather important because, while empirical research on the sample of developed countries has found a non-existent or negative relationship between government size and economic growth, individual revenue and expenditure items can have very different impacts on economic growth and hence on the convergence process itself. The analysis of public finances can also help identify those commonly shared preferences in spending and revenues where old and new member states can agree on to strengthen the common budget of the EU in the future. |
| Keywords: | general government, public finances, economic convergence, Central and Eastern Europe |
| JEL: | E62 H11 P35 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:iwe:workpr:275&r= |
| By: | Szendrei, Tibor; Eross, Andrea; Mohammed, Mustapha; Ersoy, Erkal |
| Abstract: | As climate change becomes an ever-present problem, efforts have been made to make energy generation greener. One key tool to encourage renewable energy generation are feed-in-tariff policies, which have been employed in various countries across Europe. Using quarterly data, this study investigates the impact these policies had on the greening of the economy, on carbon emissions and on macroeconomic factors in European countries for the period 2011-2021. To achieve this, an energy augmented production function is postulated and estimated using a Bayesian Global VAR framework. We find a large degree of heterogeneity in the impact of feed-in-tariffs have on renewable energy penetration across the countries. Furthermore, negative externalities of simultaneous employment of green finance is found, highlighting that some coordination might be necessary to maximise the impact of such policies in achieving the goal of a greener energy profile. |
| Keywords: | Bayesian Global VAR, Energy policy, Feed-in-tariff, GIRF, renewable energy, spillover effects |
| JEL: | Q43 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:hwuaef:299236&r= |
| By: | Cristiano Salvagnin; Aldo Glielmo; Maria Elena De Giuli; Antonietta Mira |
| Abstract: | The European carbon market plays a pivotal role in the European Union's ambitious target of achieving carbon neutrality by 2050. Understanding the intricacies of factors influencing European Union Emission Trading System (EU ETS) market prices is paramount for effective policy making and strategy implementation. We propose the use of the Information Imbalance, a recently introduced non-parametric measure quantifying the degree to which a set of variables is informative with respect to another one, to study the relationships among macroeconomic, economic, uncertainty, and energy variables concerning EU ETS prices. Our analysis shows that in Phase 3 commodity related variables such as the ERIX index are the most informative to explain the behaviour of the EU ETS market price. Transitioning to Phase 4, financial fluctuations take centre stage, with the uncertainty in the EUR/CHF exchange rate emerging as a crucial determinant. These results reflect the disruptive impacts of the COVID-19 pandemic and the energy crisis in reshaping the importance of the different variables. Beyond variable analysis, we also propose to leverage the Information Imbalance to address the problem of mixed-frequency forecasting, and we identify the weekly time scale as the most informative for predicting the EU ETS price. Finally, we show how the Information Imbalance can be effectively combined with Gaussian Process regression for efficient nowcasting and forecasting using very small sets of highly informative predictors. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2406.05094&r= |
| By: | Silvia Albrizio; Beatriz Gonzalez; Dmitry Khametshin |
| Abstract: | This paper investigates the impact of monetary policy on capital misallocation, focusing on its heterogeneous effects on firms. Using Spanish firm-level data spanning 1999 to 2019, we demonstrate that expansionary monetary policy leads to a reduction in capital misallocation, measured by the within-industry dispersion of firms’ marginal revenue product of capital (MRPK). To analyze the underlying mechanism, we first examine the intensive margin and find that high-MRPK firms exhibit a greater increase in investment and debt financing relative to low-MRPK firms following a monetary policy easing surprise. We also find that a firm’s MRPK serves as a stronger determinant of its investment sensitivity to monetary policy than factors such as age, leverage, or cash, suggesting that MRPK is a reliable proxy for financial frictions. Next, we explore the extensive margin and demonstrate that monetary policy easing stimulates entry and discourages exit, although the quantitative impact is small. Moreover, we find no significant changes in the composition of high- and low-MRPK entrants or exiters. Overall, our findings suggest that expansionary monetary policy primarily reduces capital misallocation by alleviating financial frictions among incumbent productive and constrained firms. |
| Keywords: | monetary policy; financial frictions; investment; misallocation; productivity |
| Date: | 2024–06–14 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/121&r= |
| By: | Schulze, Meike |
| Abstract: | The recent political consensus on the European Critical Raw Materials Act (CRMA) marks a significant step towards a common raw materials policy within the European Union (EU). Against the backdrop of increasing geopolitical tensions, the EU aims to bolster its "strategic autonomy" within its raw material supply chains. To achieve this goal, it is essential for the EU and its member states to enhance collaboration with mineralrich third countries. The current geopolitical environment will require a concerted effort on the part of the EU with respect to its raw material diplomacy, as only through such effective engagement will the EU be able to diplomatically and programmatically implement raw material partnerships that appeal to third countries. |
| Keywords: | geo-economic fragmentation, EU's raw materials policy, Critical Raw Materials Act (CRMA), Carbon Border Adjustment Mechanism (CBAM), supply chains |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:swpcom:297220&r= |
| By: | Sanctuary, Mark (KTH Royal Institute of Technology & IVL Swedish Environmental Research Institute); Lavenius, Axel (IVL Swedish Environmental Research Institute); Parlato, Giorgio (Stockholm University); Plue, Jan (Swedish University of Agricultural Sciences); Crona, Beatrice (Stockholm University) |
| Abstract: | This paper examines the extent to which the portfolios of green funds differ from conventional funds. We use non-metric multidimensional scaling to analyse 24 549 securities held by 6888 funds traded on European markets as of March 2023. Thisnumerical methodology reduces the fund compositional matrix from thousands ofdimensions to two dimensions, revealing patterns that can be studied graphically.Each fund is classified into three categories by the EU Taxonomy: dark-green, light-green, or conventional funds. With a few exceptions, the results indicate thatthe compositional differences in fund holdings across these three types of funds aresmall: green fund portfolios are largely the same as conventional fund portfolios. Anotable exception are energy sector funds where we find compositional differencesin the holdings of green and conventional funds. Our findings suggest that the EU’sregulatory effort on sustainable finance has not yet delivered on anti-greenwashingobjectives, and that ESG based investing is doin ittle to shift fund allocations. |
| Keywords: | Sustainable finance; investment funds; ESG; Non-metric multidimensional scaling; ordination |
| JEL: | D53 G11 M14 |
| Date: | 2024–06–17 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:cesisp:0499&r= |
| By: | Sara D'Andrea; Silvia D'Andrea; Giovanni Di Bartolomeo; Paolo D'Imperio; Giancarlo Infantino; Mara Meacci |
| Abstract: | We propose a methodology to map structural reforms from granular data to an aggregate model, exploring their transmission mechanisms and their macroeconomic and social impacts. The study focuses on the rich case of the reforms associated with the Italian Recovery and Resilience Plan (RRP). We document a significant potential impact on medium- and long-term GDP and find that the labour market and education measures are the main drivers of the impact on GDP and employment. We also examine the reform distributional effects on the functional income distribution. |
| Keywords: | Fiscal structural policies; government efficiency; potential output; functional income distribution |
| JEL: | E62 E65 F54 F47 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:sap:wpaper:wp250&r= |
| By: | Miquel Oliu-Barton; Juan Mejino Lopez |
| Abstract: | Despite major progress, the cost of air pollution is still huge for the European Union |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:bre:wpaper:node_10096&r= |
| By: | Alessandra Cepparulo; Paolo Pasimeni |
| Abstract: | After more than 60 years of peace, Europe faced a watershed moment in its security, in February 2022. Following a brief overview of how years of underinvestment and fragmentation have left many weaknesses in EU defence, this study analyses the evolution of the EU defence strategy, the contribution by the EU budget and by national budgets. Finally, the paper investigates to what extent the recent increase of defence spending can have a positive effect on growth, by examining the link between defence spending and economic growth, on the basis of the existing literature. |
| JEL: | H56 H77 O40 |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:euf:dispap:199&r= |
| By: | Hochmuth, Brigitte; Merkl, Christian; Stüber, Heiko |
| Abstract: | This paper shows that less generous unemployment benefits in one country may generate substantial negative long-run consumption spillovers to non-reforming countries under incomplete consumption insurance. While lower benefits reduce unemployment in the reforming country, employed workers increase their precautionary savings to compensate for reduced government-provided insurance. A portion of these additional savings flows to the non-reforming country and depresses long-term consumption due to the negative net foreign asset position. To discipline our quantitative model, we estimate the increase of Germany's tradable sector in the aftermath of the Hartz unemployment insurance reform based on firm-level data. Our quantitative model matches a significant fraction of various macroeconomic trends after the reform, namely Germany's persistent increase of aggregate savings and net foreign assets, the increase of net exports, the real exchange rate depreciation within the Eurozone, and the decline in unemployment. Conversely, Germany's wage moderation before the reform appears to be unrelated to most of these phenomena. |
| Keywords: | Unemployment insurance reform, spillover effects, precautionary savings |
| JEL: | E21 E24 F16 F41 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwqwdp:298854&r= |
| By: | Haavio, Markus; Heikkinen, Joni; Jalasjoki, Pirkka; Kilponen, Juha; Paloviita, Maritta; Vänni, Ilona |
| Abstract: | We depart from the common reaction function-based approach used to infer central bank preferences. Instead, we extract the tone from the textual information in the central bank communication using both a lexicon-based approach and a language model. We combine the tone with real-time information available to the monetary policy decision-maker and directly estimate the loss function. We find strong and robust evidence of asymmetry in the case of the European Central Bank during 1999-2021: the slope of the loss function was roughly three times steeper when inflation exceeded the target compared to when it was below the target. This represents a significant departure from the quadratic and symmetric monetary policy loss function typically applied in macro models. |
| Keywords: | central bank communication, textual analysis, language models, asymmetric loss function, optimal monetary policy |
| JEL: | E31 E52 E58 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bofrdp:298852&r= |
| By: | Willem J. Kooi; Ronald Albers |
| Abstract: | The Covid-19 pandemic threated squeezing companies’ liquidity as cash inflows fell with the sudden drop in sales and cash got locked up, for instance in inventories. At the same time, companies still had to service their payment obligations, with trade credit exposures We examine the potential for liquidity stress due to cross-exposures in key parts of non-financial corporations and firms that can occur in the face of adverse and asymmetric aggregate demand and supply shocks. Companies are exposed to these differently depending on their activity, level of human interaction, degree of automation and digitalisation, integration in vulnerable (cross-border) supply chains, and, crucially, their access to finance. We take the case of Sweden, where such corporate asymmetric cross-exposures are relatively large in an EU perspective. For this purpose, we develop a new indicator of potential liquidity stress with an assessment of possible cascading effects across sectors using an input-output framework to gauge the risk of liquidity shortages in the most directly affected branches rippling through the supply chain. We conclude that potential for liquidity stress and significant cascading effects was present at the onset of the Covid-19 pandemic but that forceful policy action prevented such risks from materialising, However, we argue that part of the pass-through via such financial cross-exposures might happen with a delay as policy support is withdrawn, and/or as new major disturbances hit the economy. |
| Keywords: | Trade credit, corporate liquidity, pandemic, Albers, Kooi. |
| JEL: | D22 D25 E32 E65 G31 O52 |
| Date: | 2022–10 |
| URL: | https://d.repec.org/n?u=RePEc:euf:ecobri:073&r= |
| By: | Güntner, Jochen; Reif, Magnus; Wolters, Maik H. |
| Abstract: | We use a structural VAR model to study the German natural gas market and investigate the impact of the 2022 Russian supply stop on the German economy. Combining conventional and narrative sign restrictions, we find that gas supply and demand shocks have large and persistent price effects, while output effects tend to be moderate. The 2022 natural gas price spike was driven by adverse supply shocks and positive storage demand shocks, as Germany filled its inventories before the winter. Counterfactual simulations of an embargo on natural gas imports from Russia indicate similar positive price and negative output effects compared to what we observe in the data. |
| Keywords: | Energy crisis, German natural gas market, narrative sign restrictions, natural gas price, structural scenario analysis, vector-autoregression |
| JEL: | E32 F51 Q41 Q43 Q48 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:imfswp:299246&r= |
| By: | Carlos G\'oes |
| Abstract: | Can trade integration induce product innovation? I document that countries that joined the European Union (EU) started producing more product varieties, investing more in R&D, and trading more compared to candidate countries that did not join at a given horizon. Additionally, I show that a plausibly exogenous increase in market access increases the probability of a given country starting production of and exporting a given product. To rationalize this reduced-form evidence, I propose a new quantitative framework that integrates the forces of specialization and market size. This is a dynamic general equilibrium model of frictional trade and endogenous growth with arbitrarily many asymmetric countries that nests the Eaton-Kortum model of trade and the Romer growth model as special cases. The key result is an analytical expression to decompose gains from trade into dynamic and static components. In this framework, the product innovation growth rate increases with higher market access. Finally, a quantitative version of the model suggests that: (a) the EU enlargement increased its long-run yearly growth rate by about 0.10pp; and (b) dynamic gains can account for between 65-90% of total welfare gains from trade. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2406.08727&r= |
| By: | Sébastien Bock (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Aya Elewa (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Sarah Guillou (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Mauro Napoletano (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Lionel Nesta (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po) |
| Abstract: | Over the past 20 years, the gap in per capita income between the United States and the eurozone, which stood at around €10, 000 in 2000, has not narrowed. It has widened since 2012. GDP per capita in the eurozone fell from 77% to 72% of US GDP per capita the 2000 and 2019, thus diverging from the level of wealth on the other side of the Atlantic.This gradual decoupling of GDP per capita started before the pandemic. This Policy Brief therefore looks at this European lagging – the widening gap – over the twenty years before the pandemic and the energy crisis, from 2000 to 2019, and explores possible explanations for this decoupling. Our results show that divergence between the eurozone and the United States is mainly due to lower hour productivity growth in the former. It also appears that capital, much more than differences in working hours, is a major factor in the divergence between the two zones. Productive efficiency diverges because of lower capital intensity in information and communication technology (ICT) equipment on the one hand, and in intangible assets on the other. The amount of ICT capital per job was five times higher in the United States in 2019; the amount of intangible capital per job was three times higher. These yawning gaps in 2019 were not as much as wide in 2000. Of course, there are also big differences between the Member States of the eurozone, so we must be careful not to draw premature conclusions about the European aggregate and the inadequacy of Europe's policies. Indeed, Germany comes close to the US level (82% in 2019); France stands out for its sustained intangible investment, but without distinguishing itself in terms of GDP growth; and Italy lags behind, with very low level of productivity gains and intangible investment, while Spain is in a process of catching up. Despite these intra-European differences, the capital factor seems to be the driving force behind the gap and divergence for all the countries observed. And by its very nature, the deficit in capital accumulation will also be the cause of divergence after 2019. If policy recommendations are to be defined, they must aim at increasing the investment in ICT and intangible assets to catch up with the level of capital available per job in the United States. |
| Date: | 2024–05–30 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04593877&r= |
| By: | Bellani, Luna; Berriochoa, Kattalina; Kapteina, Mark; Schwerdt, Guido |
| Abstract: | We study the effects of information on attitudes towards inheritance taxation using survey experiments fielded in Germany. We show that information about tax allowances increases demand for higher taxes and shifts public opinion from favoring abolition to supporting the tax. Effects are primarily due to a prevalent underestimation of tax allowances and the alteration of people's expectations of being affected by such taxes. In contrast, information highlighting the increasing proportion of inherited wealth only negligibly affects policy demand. Our results suggest that pocketbook motives and misinformation may contribute to explaining the paradox of limited demand for inheritance taxation despite growing inequality concerns. |
| Keywords: | capital taxation, equality of opportunity, inheritance tax, information, randomized experiment |
| JEL: | H52 I22 D72 D83 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cexwps:299225&r= |
| By: | Frederic Boissay; Fabrice Collard; Cristina Manea; Adam Hale Shapiro |
| Abstract: | The paper explores the state–dependent effects of a monetary tightening on financial stress, focusing on a novel dimension: the nature of supply versus demand inflation at the time of policy rate hikes. We use local projections to estimate the effect of high frequency identified monetary policy surprises on a variety of financial stress measures, differentiating the effects based on whether inflation is supply–driven (e.g. due to adverse supply or cost–push shocks) or demand–driven (e.g. due to positive demand factors). We find that financial stress flares up after a policy rate hike when inflation is supply–driven, but it remains roughly unchanged, or even declines when inflation is demand–driven. Our findings point to a particular tension between price stability and financial stability when inflation is high and largely supply–driven. |
| Keywords: | supply and demand; inflation; monetary policy tightening; financial stresses |
| JEL: | E1 E3 E6 G01 |
| Date: | 2023–12–15 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedfwp:97503&r= |
| By: | L. Dary Beltran; Manuel Alejandro Cardenete; Ferran Sancho |
| Abstract: | In response to increased awareness of climate change, environmental sustainability has become a policy objective in Europe. Despite a decrease in greenhouse gas emissions, the European Commission deems current progress insufficient. Discussions on implementing environmental policies persist, with environmental taxation emerging as one of the most controversial yet potentially effective economic instruments for reducing emissions. However, the extent of its impact on the economy remains under debate, as improvements in welfare and environmental quality hinge on various economic, political, and public preference factors. Therefore, we analyse the economic impact of introducing an environmental tax to achieve emission reduction targets in Spain, while also testing two systems for recycling tax revenues. This allows us to assess the potential for a second dividend. We select Spain as the unit of analysis due to its minimal utilisation of environmental taxes, as it ranks among the European countries that are least active in combating climate change using taxation. |
| Keywords: | Environmental taxation; Emissions mitigation; Tax recycling. |
| JEL: | D57 E16 H21 H23 |
| Date: | 2024–06–19 |
| URL: | https://d.repec.org/n?u=RePEc:aub:autbar:975.24&r= |
| By: | Erlend Hordvei; Sebastian Emil Hummelen; Marianne Petersen; Stian Backe; Pedro Crespo del Granado |
| Abstract: | The European Commission's new definition of green hydrogen provides clear guidelines and legal certainty for producers and consumers. However, the strict criteria for electrolysis production, requiring additionality, temporal correlation, and geographical correlation, could increase hydrogen costs, affecting its competitiveness as an energy carrier. This study examines the impact of these European regulations using a stochastic capacity expansion model for the European energy market up to 2048. We analyze how these requirements influence costs and investment decisions. Our results show that green hydrogen production requirements will raise system costs by 82 Euro billion from 2024 to 2048, driven mainly by a rapid transition from fossil fuels to renewable energy. The additionality requirement, which mandates the use of new renewable energy installations for electrolysis, emerges as the most expensive to comply with but also the most effective in accelerating the transition to renewable power, particularly before 2030. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2406.07149&r= |
| By: | Nicolás Forteza (Banco de España); Elvira Prades (Banco de España); Marc Roca (Banco de España) |
| Abstract: | On 28 December 2022, the Spanish government announced a temporary Value Added Tax (VAT) rate reduction for selected products. VAT rates were cut on 1 January 2023 and are expected to go back to their previous level by mid-2024. Using a web-scraped dataset, we leverage machine learning techniques to classify each product. Then we study the price effects of the temporary VAT rate reduction, covering the daily prices of roughly 10, 000 food products sold online by a Spanish supermarket. To identify the causal price effects, we compare the evolution of prices for treated items (that is, subject to the tax policy) against a control group (food items outside the policy’s scope). Our findings indicate that, at the supermarket level, the pass-through was almost complete. We observe differences in the speed of pass-through across different product types. |
| Keywords: | price rigidity, inflation, consumer prices, heterogeneity, microdata, VAT pass-through |
| JEL: | E31 H22 H25 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:bde:wpaper:2417&r= |
| By: | Sebastien Bradley; Javier Flórez Mendoza (The Vienna Institute for International Economic Studies, wiiw); Mario Larch; Yoto V. Yotov |
| Abstract: | This paper introduces the Granular Trade and Production Activities (GRANTPA) database, which covers international trade flows for 3, 124 products and 247 countries over the period 1995-2019 as well as domestic trade flows and production data for the same number of products and years for a subset of 35 European economies. The original data sources that we employ are Eurostat’s Comext and Prodcom databases. A gravity application delivers a large set of product-level ‘home bias’ estimates, which cannot be obtained without domestic trade flows. The average estimates on the standard gravity variables in our model (e.g., distance) are comparable to those from the related literature. However, our disaggregated estimates are very heterogeneous across products, thus highlighting the importance of our new database. |
| Keywords: | Gravity Data, Structural Gravity, Domestic Trade Flows, Disaggregated Gravity Estimates, Home Bias Estimates |
| JEL: | C81 F13 F14 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:wii:wpaper:248&r= |
| By: | Martijn Hoogeland; Lazaros Dimitriadis; Magdalena Mandl |
| Abstract: | A spending review is a budgetary instrument that allows national authorities to improve the quality of their public spending. It helps in promoting the re-prioritisation of public expenditure and assessing whether existing expenditure items are still efficient and in line with new policy priorities. Despite the existence of a set of Common Principles on expenditure allocation, spending reviews are not always fully optimised or linked to national budget discussions. Therefore, the European Commission guides and assists Member States in the conduct of spending reviews through the Country-Specific Recommendations, as well as through two other prominent EU initiatives: the Technical Support Instrument and the Recovery and Resilience Facility. This paper provides an overview of the new elements in the reviews conducted in these contexts. The findings show that there are improvements, inter alia, in terms of the scope of the reviews, the steering done during the process and the implementation of results in budgets. This indicates that the recent spending reviews are now more aligned with the Common Principles on expenditure allocation and that governance and transparency have improved. However, there is still further room for improvement, for example in linking review results to (multi-)annual budgets. |
| JEL: | E62 H50 H60 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:euf:dispap:200&r= |
| By: | Fluchtmann, Jonas (OECD); Glenny, Anita Marie (Aarhus University); Harmon, Nikolaj (University of Copenhagen); Maibom, Jonas (Aarhus University) |
| Abstract: | Using data on applied-for jobs for the universe of Danish UI recipients, we examine variation in job search behavior both across individuals and over time during unemployment spells. We find large differences in the level of applied-for wages across individuals but over time all individuals adjust wages downward in the same way. The decline in applied-for wages over time is descriptively small but economically important in standard models of job search. We find similar results when examining variation in the non-wage characteristics of applied-for jobs and in the search methods used to find them. We discuss implications for theory. |
| Keywords: | job search dynamics |
| JEL: | J64 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17048&r= |
| By: | Eder, Andreas; Koller, Wolfgang; Mahlberg, Bernhard |
| Abstract: | This paper investigates the contribution of industrial robots to employment change in manufacturing in a sample of 17 European countries and the USA over the period 2004 to 2019. We combine index decomposition analysis (IDA) and production-theoretical decomposition analysis (PDA). First, we use IDA to decompose employment change in the manufacturing industry into changes in (aggregate) manufacturing output, changes in the sectoral structure of the manufacturing industry, and changes in labour intensity which is a composite index of labour intensity change within each of the nine sub-sectors of total manufacturing. Second, we use PDA to further decompose labour intensity change to isolate the contribution of technical efficiency change, technological change, human capital change, change in non-robot capital intensity and change in robot capital intensity to employment change. In almost all of the countries considered, the labour intensity is falling in entire manufacturing, which has a dampening effect on employment. Robotisation contributes to this development by reducing labour intensities and employment in all countries and sub-sectors, though to varying degrees. Manufacturing output, in turn, grows in all countries (except Greece, Spain and Italy), which increases employment and counteracts or in some countries even more than offsets the dampening effect of declining labour intensities. The structural change within manufacturing has an almost neutral effect in many countries. |
| Keywords: | automation; robotisation; decomposition; structural change; data envelopment analysis |
| JEL: | C43 J21 J24 O33 |
| Date: | 2024–06–04 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121128&r= |
| By: | Thöne, Michael |
| Abstract: | Die Europäische Union wird in ihren gegenwärtigen Strukturen oftmals als schwerfällig, entscheidungshemmend, ineffizient und somit nicht wirklich erweiterungsfähig charakterisiert. Pandemie, Ukrainekrieg, Energiekrise und die zunehmend ungewisse Rolle in der Weltwirtschaft haben den großen Modernisierungsdruck auf die EU weiter erhöht. Die Struktur- und Kohäsionspolitik ist in diesem Kontext doppelt interessant. Sie ist mit 30 Prozent des regulären EU-Haushalts eines ihrer wichtigsten Handlungsfelder, das sich über die Jahrzehnte zu einem komplexen und intransparenten Ziel- und Instrumentengeflecht entwickelt hat, wodurch sie zu einem "Teil des Problems" geworden ist. Zugleich ist die Regionalpolitik traditionell ein "Teil der Lösung", wann immer es darum geht, durch finanziellen Ausgleich den Weg zu Erweiterung und/oder Vertiefung der EU zu ebnen. Das Papier untersucht diese Doppelfunktion der Kohäsionspolitik, indem es die Fiskalarchitektur beleuchtet, die das tragende Gerüst unter Konvergenz- und Kohäsionszielen bildet. In mehreren Schritten wird die Kohäsionspolitik in ihrer Funktion als ein europäischer Finanzausgleich betrachtet. Die Geschichte der Regionalpolitik wird nachgezeichnet als eine Entwicklung, in der das Ausgleichsmotiv immer zuerst kam, bevor kohäsionspolitische Begründungen über instrumentelle oder finanzielle Ausweitungen dieses Politikfeldes gelegt wurden. Der "Mezzogiorno-Test" zeigt, dass die Funktion als Finanzausgleich unverändert dominiert: Neben der fördernden Kohäsionspolitik spielt die ausgleichende Kohäsionspolitik faktisch eine sehr wichtige Rolle. Das wird im Papier quantitativ illustriert sowie mit einer vertieften Betrachtung des kaum analysierten Mechanismus, der für die Allokation der EU-Gelder über die Mitgliedstaaten und deren Regionen sorgt. Nicht zuletzt mit Blick auf diesen als "Berlin-Methode" bezeichneten Finanzausgleichstarif formuliert das Papier mehrere Empfehlungen zu Modernisierung der Strukturpolitik. Dabei geht es darum, die Bestimmung der Kohäsionspolitik, auch als Finanzausgleich zu wirken, offen anzuerkennen und produktiv für die Weiterentwicklung dieses Politikfeldes zu nutzen. Der Charakter als vertikaler Finanzausgleich mit horizontaler Wirkung und starkem investiven Fokus sollte beibehalten werden, aber gemäß dem Subsidiaritätsprinzip weiterentwickelt werden. In diesem Zuge kann auch der "Luxus-Finanzausgleich" zurückgefahren werden, der heute durch die Zuweisung von Kohäsionsmittel selbst an die reichsten Regionen der EU durchgeführt wird und 27 Milliarden Euro im Jahr kostet. Eine stärke Beachtung des Subsidiaritätsprinzips in der Kohäsionspolitik erleichtert es den Mitgliedstaaten auch, moderne place-based policies zu realisieren, mit denen Klimaschutz- und weitere Transformationsziele reibungsfreier und wirkungsvoller implementiert werden können. |
| Keywords: | Kohäsionspolitik, Europäische Struktur- und Investitionsfonds, EU-Finanzausgleich |
| JEL: | H70 H77 R11 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:uoccpe:299229&r= |
| By: | Kenichi Kawasaki (National Graduate Institute for Policy Studies, Tokyo, Japan) |
| Abstract: | Global greenhouse gas (GHG) emissions have continued to increase. The targets of GHG emissions reduction under the Paris Agreement have been far from achievement. Carbon pricing has been implemented but it is limited, covering less than a quarter of global GHG emissions. This paper presents an overview of recent developments in carbon dioxide (CO2) emissions and investigates quantitatively the relative significance of the impact of carbon pricing, using a Computable General Equilibrium (CGE) model. The results of model simulations suggest that the impact of carbon pricing in the European Union (EU) member states and the Organisation for Economic Co-operation and Development (OECD) countries would be limited compared with that of a global initiative. Carbon tax (once introduced in a strong enough form worldwide, in particular if it included developing countries) would be effective for substantially reducing global CO2 emissions. However, the adverse economic impact of carbon pricing would be serious and much larger than the magnitude of possible carbon tax revenue. On the other hand, the impact of a carbon border adjustment mechanism (CBAM) would be minor compared with that of a carbon tax, regardless of the coverage of countries. Trade effects of a CBAM could more or less be offset by trade liberalization. The economic and trade impact of carbon pricing would vary by region as well as by sector. Climate and trade policies would need to be well designed and based on sound quantitative analysis. |
| Keywords: | carbon tax, carbon border adjustment mechanism (CBAM), European Union (EU), Computable General Equilibrium (CGE) model |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:22-13&r= |
| By: | Krebs, Tom (University of Mannheim); Weber, Isabella (University of Massachusetts Amherst) |
| Abstract: | In the wake of the global energy crisis, many European countries used energy price controls to fight inflation and to stabilize the economy. Despite its wide adoption, many economists remained skeptical. In this paper, we argue that price controls should be part of the policy toolbox to respond to shocks to systemically important sectors because not using them can have large economic and political costs. We put forward our arguments in two steps. In a first step, we analyze the impact on the German economy and society of the global energy crisis that followed Russia's attack on Ukraine in February 2022. Our analysis shows that energy shocks matter. Specifically, the one-year GDP loss of the energy crisis 2022 amounts to 4 percent and is comparable to the short-run output losses during the COVID-19 crisis 2020 and the global financial crisis 2008. In addition, during the energy crisis 2022 inflation rates rose dramatically and real wages dropped more than in any other year in post-war Germany. There are also clear signs that the crisis is causing severe long-term economic damage (hysteresis effects). At the beginning of 2024, GDP is 7 percent and real wages are 10 percent below the pre-COVID-19 trend. We argue that the German government handled the immediate response to the energy shock well, but subsequently waited too long to introduce an energy price brake in 2022. This failure to act decisively in response to heightened economic insecurity coincided with a strong rise of the approval rates of the far-right AfD in the summer of 2022. We also show that the German energy price brake was an effective price stabilization policy for households, but did not protect the industrial base appropriately making it more likely that the German economy will continue to stagnate. In a final step, we turn to the use of price controls as an optimal policy response to an energy shock within a general equilibrium framework. We develop a simple production model with an energy sector and shows that price controls are socially optimal whenever self-fulfilling expectations generate endogenous price uncertainty in the wake of an energy shock. We also link our analysis to the so-called sunspot literature that was developed in the 1980s as a response to the rational-expectations revolution in macroeconomics. Finally, we use our theoretical analysis to shed some light on the economic policy debate and the resistance of German mainstream economists to the introduction of energy price controls in 2022. |
| Keywords: | global energy crisis, German economy, endogenous uncertainty, price controls, inflation, stabilization policy |
| JEL: | D52 D84 E12 E32 E64 Q43 Q48 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17043&r= |
| By: | von Ondarza, Nicolai; Stürzer, Isabella |
| Abstract: | The debate in the European Union (EU) on the expansion of majority decision-making is entering a new round. Germany, in particular, is seeking to build a coalition in favour of more majority decisions in light of the, at times, difficult decision-making process concerning foreign and security policy, and the prospect of future EU enlargement. Too often, however, this debate is not taking into account how and with what results majority decisions are being used in other, sometimes equally contested policy areas. An analysis of the public votes since 2010 compiled in the SWP's new EU Council Monitor shows that EU member states generally strive for consensus, even in majority decisions. Larger groups of member states are almost never outvoted. Still, Hungary and Poland increasingly stand out as two states that are outvoted more often than others, albeit to a slightly lesser degree than the United Kingdom (UK) was before Brexit. One way out of the dilemma between strengthening the EU's ability to act and protecting vital national interests could be a well-balanced "sovereignty safety net". |
| Keywords: | European Union (EU), majority decision-making, qualified majority voting (QMV), EU enlargement, public votes, "sovereignty safety net" |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:swpcom:297221&r= |
| By: | Mikaela Gavas (Managing Director & Senior Policy Fellow, Center for Global Development); Samuel Pleeck (Research Associate, Center for Global Development); Andrew Rogerson (Center for Global Development); San Bilal (Senior Executive & Associate Director, European Centre for Development Policy Management); Karim Karaki (Head of Economic Recovery and Transformation, European Centre for Development Policy Management) |
| Abstract: | Already constrained by the economic aftershocks of COVID-19, the impact of the war in Ukraine, and the food and climate crisis, low-income countries and lower-middle-income countries now face a combination of soaring debt and high interest rates. Confronted with insufficient liquidity to respond to these challenges and unable to access capital markets, they need additional concessional finance, in the form of grants and soft loans. The European Union (EU) already provides concessional finance, but it is not nearly enough to respond to their growing needs. With European budgets under more strain than ever, this paper puts forward the case for finding ways to maximise the overall efficiency and impact of European concessional finance and in doing so, better articulating and combining grants and concessional loans in its support and investment toolbox. To remain relevant and maintain relationships and influence with partner countries–even more in a world characterised by the polycrisis and geopolitical fragmentation–the EU will have to step up its game when it comes to providing more strategic concessional finance. The paper sets out six complementary and non-mutually exclusive options for maximising EU concessional finance with a view to a strategic set of decisions to be made for the next EU Multiannual Financial Framework. |
| Date: | 2024–03–21 |
| URL: | https://d.repec.org/n?u=RePEc:cgd:ppaper:325&r= |
| By: | Diana Radu |
| Abstract: | As the number and magnitude of climate-related disasters in the EU are increasing, the impact of these disasters on public finances also depends on the extent to which budgets and budget plans reflect fiscal risks from disasters. At the same time, as many of these disasters can no longer be considered exceptional events, dealing with the fiscal cost of disasters calls for an informed national disaster financing strategy, also as a way to enhance a country’s climate fiscal resilience. This discussion paper presents a structured approach to Disaster Risk Financing (DRF) in the EU Member States and describes the key elements needed to better understand, plan for and manage the fiscal cost of disasters. The paper proposes a step-by-step approach to DRF, building on previous analysis on the main concepts and ways to reduce and limit the fiscal cost of disasters. Member States willing to develop a national approach to disaster risk financing can act under four pillars to understand: (1) the fiscal impact of disasters, (2) private sector risk ownership, (3) public sector disaster risk management and (4) institutional arrangements. The Member States would be able to locate themselves in one stage of development of DRF: “essential”, “intermediate” or “advanced”, and then take action to limit the burden that disasters can put on public finances. |
| JEL: | G22 O11 O44 Q54 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:euf:dispap:201&r= |
| By: | Dobbelaere, Sabien (Vrije Universiteit Amsterdam); König, Michael D. (Vrije Universiteit Amsterdam); Spescha, Andrin (ETH Zurich); Wörter, Martin (ETH Zurich) |
| Abstract: | The fraction of R&D active firms decreased in Switzerland but increased in the Netherlands from 2000-2016. This paper examines reasons for this divergence and its impact on productivity growth. Our micro-data reveal R&D concentration among high-productivity firms in Switzerland. Innovation support sustains firms' R&D activities in both countries. Our structural growth model identifies the impact of innovation, imitation and R&D costs on firms' R&D decisions. R&D costs gained importance in Switzerland but not in the Netherlands, explaining the diverging R&D trends. Yet, counterfactual analyses show that policies should prioritize enhancing innovation and imitation success over cost reduction to boost productivity growth. |
| Keywords: | R&D, innovation, imitation, R&D costs, policy, productivity growth, traveling wave |
| JEL: | E61 E65 D22 O31 O47 O52 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17026&r= |
| By: | Kai Lessmann (PIK Potsdam, MCC Berlin); Friedemann Gruner (MCC Berlin, PIK Potsdam, University of Potsdam); Matthias Kalkuhl (MCC Berlin, PIK Potsdam, University of Potsdam, CEPA); Ottmar Edenhofer (PIK Potsdam, MCC Berlin, TU Berlin) |
| Abstract: | We analyze how conventional emissions trading schemes (ETS) can be modified by introducing “clean-up certificates” to allow for a phase of net-negative emissions. Clean-up certificates bundle the permission to emit CO2 with the obligation for its removal. We show that demand for such certificates is determined by cost-saving technological progress, the discount rate and the length of the compliance period. Introducing extra clean-up certificates into an existing ETS reduces near-term carbon prices and mitigation efforts. In contrast, substituting ETS allowances with clean-up certificates reduces cumulative emissions without depressing carbon prices or mitigation in the near term. We calibrate our model to the EU ETS and identify reforms where simultaneously (i) ambition levels rise, (ii) climate damages fall, (iii) revenues from carbon prices rise and (iv) carbon prices and aggregate mitigation cost fall. For reducing climate damages, roughly half of the issued clean-up certificates should replace conventional ETS allowances. In the context of the EU ETS, a European Carbon Central Bank could manage the implementation of cleanup certificates and could serve as an enforcement mechanism. |
| Keywords: | carbon removal, carbon pricing, net-negative emissions, carbon debt |
| JEL: | H23 Q48 Q54 Q58 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:pot:cepadp:79&r= |
| By: | Jennifer Feichtmayer; Regina T. Riphahn |
| Abstract: | We study the intergenerational transmission of welfare benefit receipt in Germany. We first describe the correlation between welfare receipt experienced in the parental household and subsequent own welfare receipt of young adults. In a second step, we investigate whether the observed correlations reflect causal effects of past welfare experience. We use family fixed effects estimations and Gottschalk's (1996) approach and take advantage of the long-running German Socio-Economic Panel Survey to contribute to a sparse literature. We find strong positive correlations between parental and own welfare receipt. These patterns do, however, not persist after controlling for unobserved heterogeneities. Therefore, our results suggest that the strong intergenerational correlation of welfare benefit receipt is determined by family background rather than by the experience of parental welfare benefit receipt. |
| Keywords: | welfare, social assistance, intergenerational mobility, causal effect, family fixed effects, Gottschalk estimator |
| Date: | 2023–12 |
| URL: | https://d.repec.org/n?u=RePEc:bav:wpaper:229_feichtmayer_riphahn&r= |
| By: | Jan Muckenhaupt (Technische Universität München (TUM)); Martin Hoesli (University of Geneva - Geneva School of Economics and Management (GSEM); Swiss Finance Institute; University of Aberdeen - Business School); Bing Zhu (Technische Universität München (TUM)) |
| Abstract: | Assets’ capability to hedge against inflation has again come to the forefront given the recent surge in inflation. This paper investigates the inflation-hedging capability of an important asset class, i.e., listed real estate (LRE), using data from 1990 to the end of 2023, for the main European countries in terms of LRE market capitalization, but also the U.S. By using a Panel Markov switching vector error correction model (MS-VECM), we identify the hedging ability of LRE in crisis and non-crisis periods, both in the short and long term. We additionally compare the hedging ability of LRE with that of other asset classes. Listed real estate provides an effective hedge against inflation in the long run, both in crisis and non-crisis periods. In the short term, listed real estate only hedges against inflation in stable periods. LRE effectively serves as a hedge against inflation shocks, particularly protecting against unexpected inflation from the first month and against energy inflation during stable periods. While stocks surpass LRE in long-term inflation protection and LRE has short-term benefits, gold distinguishes itself from LRE by offering reliable long-run protection, but only in economic downturns. The results should provide important insights to investors seeking to allocate resources more efficiently in those turbulent times, both for the short and long terms. |
| Keywords: | Inflation Hedging, Listed Real Estate Companies, Markov-Switching, Unexpected Inflation, Impulse Response Functions |
| JEL: | G11 G15 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:chf:rpseri:rp2434&r= |
| By: | Francesca Guadagno (The Vienna Institute for International Economic Studies, wiiw); Doris Hanzl-Weiss (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | This paper investigates the sectoral and export structures as well as the product spaces of 11 economies in Central, East and Southeast Europe (CESEE). We first employ an analysis based on revealed comparative advantages (RCAs) to identify promising sectors for future growth and then combine this analysis with a product space approach to detect related and complex products that could help these economies diversify and upgrade. The RCA analysis shows that the CESEE countries still hold a comparative advantage in manufacturing, although a slightly negative trend emerged between 2013 and 2020. Meanwhile, some services – particularly computer programming, consultancy and information service activities – have emerged as the most successful sectors to date. The product space analysis indicates that for the majority of the CESEE economies, it is possible to identify relatively complex products that could be easily targeted to spur upgrading. We also find that while we run the analysis separately for each of the 11 CESEE countries, the identified opportunities are often the same. While this is intuitively explained by the similar specialisations of these 11 countries, from a policy perspective this finding implies that each country has to deploy a battery of indicators to identify profitable and realistic niches within these broadly defined product categories. |
| Keywords: | sectoral analysis, RCA-analysis, product space, CESEE, complexity analysis |
| JEL: | F14 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:wii:rpaper:rr:474&r= |
| By: | Michał Gradzewicz (Narodowy Bank Polski; SGH Warsaw School of Economics) |
| Abstract: | A recent discussion on the sources of inflation rise in the period 2022- 2023 highlights the role of non-labor components of GDP deflator, calling them profits. The aim of our analysis is to measure profits more carefully, separating them from the cost of capital and to assess their contribution to changes of different measures of prices in the economy. We show that material costs (and especially the prices of materials) are the most important source of variation of gross output deflator, responsible for over 50% of its variance in the period 1997-2022. The role of profits in general, and after the pandemic in particular, differs between various price measures. They are contributing high to the increases of value added deflator in the period 2021-2023, whereas their contribution to gross output deflator is muted. Labor costs (of which wages are relatively more important than unit efficiency of hours) are an important contribution to both output and value added deflators. The contribution of capital is less important, with a more balanced contributions of capital price and unit efficiency. Moreover, we stress that the most attempts to assess the role of profits in the evolution of prices are based on approximate decompositions. We show that the contributions calculated without the approximation error indicate a lower, although still significant, contribution of profits to price increases in the period 2021-2022. We also present how the cost (or profit) components correlate with prices and we highlight the differences in the role of various components across industries. |
| Keywords: | profits, capital costs, rental costs of capital, capital share, sources of inflation |
| JEL: | D24 E01 E22 E31 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:nbp:nbpmis:370&r= |
| By: | Klinker, Iris (SEO Amsterdam); ter Weel, Bas (SEO Amsterdam) |
| Abstract: | This research documents changes in employment and wages in the Netherlands for different types of workers. We compare 2017 to 2023 using regression-adjusted wages to make sure changes in composition of the workforce do not influence our estimates. The research period has been characterised by high labour demand, negative supply shocks, high levels of inflation and economic lockdowns, all of which have contributed to substantial labour-market dynamics. Our findings suggest that employment has been growing by 2 percent in the period 2017-2023, of which 1.8 percent has been due to additional workers finding employment. Women have experienced the largest increase in employment, while the employment of men on temporary contracts has slightly fallen. Wages have been rising for workers at the bottom of the wage distribution. From the median of the wage distribution onwards real gross hourly wages have been fallen. The most likely explanation for rising wages at the bottom is the stepwise increase in minimum wages enforced by new labour-market legislation. |
| Keywords: | employment, inflation, wages, COVID-19 |
| JEL: | E24 E31 J21 J31 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17049&r= |
| By: | Steuernagel, Anne; Krahé, Max |
| Abstract: | Im Kontext des Inflationsschubs der Jahre 2022/23, der damit einhergehenden Reallohnverluste und des nach wie vor großen Niedriglohnsektors in Deutschland gibt es anhaltende Diskussionen über eine weitere deutliche Anhebung des Mindestlohns. Angesichts des bisherigen Erfolgs dieses Politikinstruments und um den Möglichkeitenraum auch jenseits der 14 und 15 Euro, die zuletzt gefordert wurden, zu erkunden, bietet dieses Papier eine erste Einordnung eines möglichen Mindestlohns in Höhe von 16 Euro. Drei Aspekte werden untersucht: Wer würde von einer solchen Anhebung berührt, welche Arbeitsmarkteffekte wären zu erwarten und was wären die fiskalischen Konsequenzen? Unsere Schlussfolgerung ist: eine schrittweise Anhebung auf diese Höhe ist ambitioniert, aber vertretbar. Jedoch müssten, wie bereits bei der Erhöhung auf 12 Euro, Verstöße gegen das Mindestlohngesetz genau im Auge behalten werden. Gerade eine Besetzung der noch offenen Planstellen in den Hauptzollämtern hätte hohe Priorität. Auch die weitere Entwicklung der geringfügigen Beschäftigung müsste genau beobachtet werden. |
| Keywords: | Mindestlohn, Arbeitsmarkt |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:dzimps:297838&r= |
| By: | Schenuit, Felix; Geden, Oliver |
| Abstract: | The outgoing European Commission has published its Communication on a 2040 climate target as its last major climate policy initiative before the 2024 European elections. By recommending a net emissions reduction target of 90 per cent compared to 1990 levels, it lays the strategic foundations for the forthcoming legislative period. At the same time, the policy initiative takes the opportunity to emphasise the growing importance of the interplay between industrial and climate policy, particularly with regard to carbon management technologies. Although reforming the EU's climate policy architecture for the years 2031 to 2040 will not begin until after the upcoming European elections, the Communication offers a glimpse into the political challenges that the German government will also have to face. |
| Keywords: | European climate policy, 2040 target, emissions reduction, carbon management technologies, greenhouse gas neutrality |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:swpcom:297219&r= |
| By: | Elliot Aurissergues (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Christophe Blot (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Edgar Carpentier-Charléty; Magali Dauvin (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); François Geerolf (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Eric Heyer (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Mathieu Plane (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po) |
| Abstract: | La zone euro a traversé plusieurs crises qui ont parfois menacé sa pérennité mais qui ont aussi entraîné des réformes de sa gouvernance budgétaire et des changements dans la conduite de la politique monétaire. À la veille des élections européennes et 25 ans après sa création, la question se pose de la performance économique de la zone euro par rapport à celle de l'économie américaine. Alors que les trajectoires de PIB par habitant ont été relativement similaires entre 1999 et 2008, elles divergent notablement depuis. Nous étudions les causes possibles de ce décrochage en distinguant les facteurs d'offre et de demande. Côté offre, la zone euro s'est caractérisée sur l'ensemble de la période par une croissance de la productivité nettement plus faible qu'aux États-Unis. À l'inverse, alors qu'il a stagné aux États-Unis, le taux d'emploi de la population en âge de travailler s'est nettement amélioré dans les pays européens même si des disparités au sein du continent demeurent. Plus récemment, la divergence est également liée à l'impact de la crise énergétique et à la hausse plus forte des prix de l'énergie en Europe en lien avec la baisse de l'offre de gaz naturel russe après le déclenchement de la guerre en Ukraine. Du côté de la demande, force est de constater qu'il y a un déficit de demande agrégée bien réel en zone euro, avec une épargne qui dépasse nettement l'investissement depuis 2010, alimentant les déséquilibres commerciaux dans le monde. Cette épargne excédentaire s'explique entre autres par une politique budgétaire plus restrictive en Europe qu'aux États-Unis. Cette sous performance agrégée de la zone euro s'accompagne de trajectoires très hétérogènes au sein de la même zone. Sur l'ensemble de la période, les pays du « Nord » ont crû plus vite que la France et que les pays du « Sud ». La période récente a cependant permis à certains pays, notamment l'Italie, de combler une partie de l'écart. L'enjeu des prochaines années sera celui de la consolidation budgétaire et de ses effets sur l'activité. Il est impératif de ne pas reproduire l'erreur de 2011-2014. Une politique de consolidation budgétaire peut-être adaptée en période de reprise de l'activité mais elle est pernicieuse voire inefficace lorsque l'économie est en sous-régime ; si celle-ci doit être menée en période de basse conjoncture, elle sera moins néfaste sur l'activité en étant graduelle, lissée et non synchronisée au sein de la zone euro. Par ailleurs, la priorité de ce côté de l'Atlantique ne peut pas être uniquement le rétablissement des finances publiques, au risque de voir le fossé économique avec les États-Unis continuer à se creuser : avec les nouveaux défis mondiaux et géostratégiques, l'Europe doit financer sa sécurité, la transition écologique et les nouvelles industries vertes. Utilisant son excédent structurel d'épargne, un plan de relance européen ambitieux, ciblé à la fois sur l'offre et sur la demande, permettrait de relever ces défis tout en mettant les économies sous tension, stimulant ainsi la croissance et la productivité. Une croissance potentielle accrue plus élevée est cruciale pour la soutenabilité des dettes publiques à long terme. |
| Keywords: | union monétaire, crises, zone euro, croissance |
| Date: | 2024–06–04 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04602256&r= |