Received Wisdom and Beyond: Lessons from Fiscal Consolidation in the EU

2011 ◽  
Vol 217 ◽  
pp. R1-R18 ◽  
Author(s):  
Martin Larch ◽  
Alessandro Turrini
Keyword(s):  
Great Recession ◽  
Structural Reforms ◽  
Fiscal Consolidation ◽  
Public Finances ◽  
Eu Countries ◽  
The Great Recession ◽  
Shed Light ◽  
Over Time ◽  
The Eu

Restoring sustainable public finances in the aftermath of the Great Recession is a key challenge in most EU countries. In order to learn from history, our paper examines consolidation episodes in the EU since 1970. We shed light on the factors that favour the start of a consolidation episode and determine its success. Compared to the existing literature, we add a number of new dimensions in the analysis. First, we explore a broader set of potential ingredients of the ‘recipe for success‘, including the quality and strength of fiscal governance and the implementation of structural reforms. Secondly, we check whether the ‘recipe for success’ changed over time. Our analysis broadly confirms received wisdom concerning the conditions triggering a consolidation episode and the role of the composition of adjustment for success, with some qualifications related to the role played by government wages. In addition it provides evidence that well-designed fiscal governance as well as structural reforms improve the odds of both starting a consolidation episode and achieving a lasting fiscal correction. We also show that, over time, successful and unsuccessful consolidation episodes have become more similar in terms of adjustment composition.

scholarly journals The Role of Migration as Adjustment Mechanism in the Crisis and EMU

2018 ◽  
Vol 66 (6) ◽  
pp. 1497-1508 ◽  
Author(s):  
Peter Huber
Keyword(s):  
Great Recession ◽  
Labour Markets ◽  
Economic Conditions ◽  
Foreign Born ◽  
Demographic Groups ◽  
The Great Recession ◽  
Adjustment Mechanism ◽  
Substantial Heterogeneity ◽  
The Eu

Using ELFS data from 2004 to 2014 we analyse labour migration as an adjustment mechanism to asymmetric regional labour demand shocks shortly before, during and after the Great Recession in the EU. The results suggest that in this period migration was rather responsive to regional economic conditions, but also point to a substantial heterogeneity across demographic groups, periods and country groups. The mobility of high‑skilled persons and foreign born contributed much more strongly to the adjustment of labour markets than the migration of less‑skilled and natives. Furthermore, among the large integration steps from 2004 to 2014 (i.e., the accession of 12 countries to the EU and the successive liberalisation of immigration from the countries joining the EU after 2004 and Euro accession) mainly the EU‑enlargements worked to improve the adjustment capability of European labour markets through migration.

scholarly journals Fiscal consolidation after the Great Recession: the role of composition

2017 ◽  
Vol 70 (2) ◽  
pp. 563-585 ◽  
Author(s):  
Iván Kataryniuk ◽  
Javier Vallés
Keyword(s):  
Great Recession ◽  
Fiscal Consolidation ◽  
The Great Recession

scholarly journals The Evaluation of Recession Magnitudes in EU Countries during the Great Recession 2008–2010

2016 ◽  
Vol 16 (3) ◽  
pp. 231-244 ◽  
Author(s):  
Jiří Mazurek
Keyword(s):  
Great Recession ◽  
Econometric Model ◽  
Gdp Per Capita ◽  
Economic Openness ◽  
Eu Countries ◽  
The Great Recession ◽  
The Great Depression ◽  
The Usa ◽  
Per Capita ◽  
The Eu

Abstract The aim of this article is to compare 2008-2010 recession magnitudes in individual EU countries. For the comparison the recession magnitude scale was used. The strongest recession during the examined period took place in Latvia, Estonia, Lithuania, Greece and Ireland, while the weakest recessions in the EU occurred in France, Malta and Cyprus. Poland and Slovakia were the only two EU countries that didn’t fall into a recession, that’s why they were not included in the study. The main findings of the paper are that EU19’s recession was much smaller than both the Great Depression of the 1930s and the recent Great Recession in the USA. Furthermore, with the use of a linear econometric model it was found that recession magnitudes in EU countries were directly proportional to the countries’ GDP per capita in 2008 and growth prior to recessions, while countries’ economic openness was indirectly proportional to recession magnitudes, all the relationships being statistically significant.

The Service Sector in the Economy in Poland and European Union Countries

2015 ◽  
Vol 10 (3) ◽  
pp. 191-207
Author(s):  
Walentyna Kwiatkowska
Keyword(s):  
Service Sector ◽  
Value Added ◽  
Total Employment ◽  
Eu Countries ◽  
Gross Value Added ◽  
European Union Countries ◽  
Service Sectors ◽  
Sector Theory ◽  
The Eu

The role of the service sector in the economy is increasing in the process of socio-economic development. This tendency has been confirmed and explained by the three-sector theory formulated by A.G.B. Fisher, C. Clark, and J. Fourastie. The main goal of the paper is to show development tendencies in service sectors in Poland and the EU countries and assess them in view of the three-sector theory. The share of the service sector in the total employment and in the total gross value added in the years 2005-2013/2014 will be analysed together with two sub-sectors including market and non-market services. The research shows that the share of the service sector in total employment and total gross value added has been recently increasing in Poland as well as in other EU countries, but there is a gap in this process between Poland and the most developed EU countries. Moreover, in Poland, the role of market services has been recently increasing much faster than the role of non-market services. 

Real Estate

2017 ◽  
Author(s):  
Stefan Homburg
Keyword(s):  
Real Estate ◽  
Great Recession ◽  
House Prices ◽  
Borrowing Constraints ◽  
Macroeconomic Models ◽  
Land Prices ◽  
The Great Recession ◽  
Quantitative Importance

Chapter 6 examines real estate as a neglected feature of actual economies. It begins with an empirical overview demonstrating the preeminent role of land as a part of nonfinancial wealth. Whereas many macroeconomic models represent nonfinancial wealth by a symbol K that is interpreted as machines and equipment (if not robots), the text makes clear that such items are of minor quantitative importance. In contemporary economies, nonfinancial wealth consists chiefly of real estate. This is the proper reason so many analysts conjecture a link between house prices and the Great Recession. Changes in house prices (primarily changes in land prices) operate on the economy through their influence on nonfinancial wealth. Nonfinancial wealth affects consumption directly and investment indirectly since it relaxes or tightens borrowing constraints. Building on the results obtained in previous chapters, the text studies housing manias and leverage cycles and relates its main findings to US data.

scholarly journals The European Committee of the Regions as a watchdog of the principle of subsidiarity

2020 ◽  
Vol 27 (3) ◽  
pp. 284-301
Author(s):  
Salvatore Fabio Nicolosi ◽  
Lisette Mustert
Keyword(s):  
European Commission ◽  
Legislative Process ◽  
European Committee ◽  
Legislative Proposal ◽  
The Right ◽  
Committee Of The Regions ◽  
Regional Funds ◽  
Shed Light ◽  
The Eu

In a resolution adopted on 1 February 2018, the European Committee of the Regions noted that a legislative proposal of the European Commission concerning a Regulation that changes the rules governing the EU regional funds for 2014-2020 did not comply with the principle of subsidiarity. Accordingly, the Committee considered challenging the legislative proposal before the Court of Justice if the proposal was formally agreed upon. Although at a later stage the European Commission decided to take into account the Committee’s argument and amended the proposal accordingly, such a context offers the chance to investigate more in detail the role of the Committee of the Regions in the legislative process of the EU and, more in particular, its role as a watchdog of the principle of subsidiarity. This paper aims to shed light on a rather neglected aspect of the EU constitutional practice, such as the potential of the Committee of the Regions to contribute to the legislative process, and answer the question of whether this Committee is the right body to guarantee compliance with the principle of subsidiarity.

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