Unemployment Insurance

Unemployment is one of the ‘old risks’ that modern welfare states can be seen to have responded to, but continues to be of great importance in the twenty-first century. Unemployment insurance also appears to be more ridden by political conflicts than other social policy programmes. This chapter describes the evolution of unemployment insurance schemes in eighteen long-standing welfare states. It dates the emergence of the first laws and traces the expansion of the coverage and replacement levels of benefits during the ‘Golden Age’ to more recent periods marked by economic crisis and retrenchment in the quality of unemployment protection. Four models of unemployment insurance are identified: voluntary state-subsidized, targeted, state corporatist, and comprehensive schemes. These models sum up institutional differences that are important for understanding the cross-national variation in a broad set of outcomes—ranging from individual conditions and behaviours, such as poverty and labour supply, to macroeconomic stabilization. The quality of unemployment insurance contributes to explain, among other things, differences in poverty rates over time and among nations.

Energy Efficiency and Decarbonization in the Context of Macroeconomic Stabilization

Decarbonization is an activity aimed at reducing greenhouse gas emissions to limit climate change and global warming. Ensuring macroeconomic stabilization is the basis for ecological action. The question is whether macroeconomic stabilization helps companies, institutions and countries act for decarbonization. This article presents research on the impact of components of macroeconomic stabilization on decarbonization and energy efficiency in the largest greenhouse gas emitters in the European Union from 1990 to 2020. We focus on the following countries, France, Germany, Italy, Poland and Spain. The contribution to knowledge is using the pentagon of macroeconomic stabilization to assess macroeconomic stabilization’s impact on decarbonization and energy efficiency. According to the correlation coefficients, the Ordinary Least Squares and the Seemingly Unrelated Regression method, there is a statistically significant impact of components of macroeconomics stabilization on decarbonization and energy efficiency. Moreover, our models show a different strength and direction of relationships between the explained and explanatory variables. Research results confirm the necessity to coordinate the macroeconomic with environmental policy. We think that it is essential to use effective tools of economic support (European Union Emissions Trading System, environmental taxes) and greater pressure from European Union institutions on countries that emit harmful substances.

The global financial safety net: Evolution of the anti-crisis function in the global financial architecture

In the global financial architecture, the functions of anti-crisis support and macroeconomic stabilization are performed by the institutions of the global financial safety net (GFSN). The volume of available financing within the framework of GFNS has grown 10 times over the past decade and reached the equivalent of 4% of world GDP. The literature’s standard understanding of a system of national reserves, swap agreements, regional financial mechanisms, and the IMF requires enlargement. The article proposes the concept of an enlarged global financial safety net, namely by including two new elements — multilateral development banks and bilateral financial support. The manifestations of this phenomenon in many regions of the world are shown in the activities of the largest international development banks and at the level of macroeconomic stabilization financing by individual donor countries, including during the current COVID crisis.

FROM THE SYNTHESIS OF ECONOMIC THEORIES TO POLITICAL CONSENSUS: MONETARY AND FISCAL DILEMMAS OF MACROECONOMIC STABILIZATION IN THE CONTEXT OF THE CORONAVIRUS CRISIS

An analysis of government programs for macroeconomic stabilization of selected countries is made to establish their compliance with scientific approaches that determine the political choice in favor of the use of monetary and/or fiscal instruments for stimulation of economic activity based on the revision of the substantive provisions of neoclassical synthesis and the new macroeconomic consensus to highlight the peculiarities of interpretation of macroeconomic processes, the nature of cyclical fluctuations and ways to level and adjust them. It is established that the most popular in the political sphere are the conclusions of the new neoclassical synthesis (New Consensus in Macroeconomics), which combines the new Keynesian approach and the real business cycle approach, however, they are also adjusted in any form, depending on the priority of the government. (the desire to achieve full employment; price stabilization; economic growth and balance of payments; efficient use of limited resources), provide mostly short-term planning horizon, which complicates the exit from the “vicious circle” of economic policy, when its dynamic development becomes hostage to the need for constant adaptation in accordance with the changing conditions, which it itself by its own adjustment causes. It was found that in the situation of the Coronavirus crisis the issues of combating the simultaneous shocks of supply and demand, and unemployment in particular, are recognized as a priority and sought to be addressed through a combination of monetary and fiscal policy tools, including regulatory competition by neoprotectionism. defined by us as a set of principles, tools and methods of regulatory policy in international trade, international capital movements and foreign investment, as well as international monetary, financial and credit relations, the imperative of which is to stimulate socio-economic development and economic growth by creating conditions for increasing the economic activity of all economic entities.

The Challenge of Macroeconomic Stabilization in Fragile States

We develop a dependent-economy model with macroeconomic policies derived from a policymaker maximization problem. The model assumes that the probability of state failure is a function of the economic situation and the government’s capacity to deliver favors through public employment. We solve the model under three different policymakers’ objectives: the “political” policymaker, technocratic policymaker, and social planner. Public employment is higher if it is decided by the political policymaker, but the probability of state failure is higher because fiscal deficits lead to inflation. A technocratic policymaker implements a conservative fiscal plan but the probability of state failure is higher than what could be achieved if this probability was taken into account in the objective function. Comparative statics provide a “test” of the objective function: a benevolent policymaker should take advantage of additional fiscal space to improve the economy, not to spend all resources on policymaker consumption or on public wages.