: Monetary Economics and the European Union. Lecture 8. Instructor: Prof Robert Hill. The Costs and Benefits of Monetary Union II
|
|
- Arnold Stephens
- 5 years ago
- Views:
Transcription
1 : Monetary Economics and the European Union Lecture 8 Instructor: Prof Robert Hill The Costs and Benefits of Monetary Union II De Grauwe Chapters 3, 4, 5 1
2 1. Countries in Trouble in the Eurozone That Followed Irresponsible Fiscal Policies Leading Up to the Crisis Greece s debt-to-gdp ratio: percent percent percent percent Italy s debt-to-gdp ratio: percent percent percent percent 2
3 2. Countries in Trouble in the Eurozone that Did Not Follow Irresponsible Fiscal Policies Leading Up to the Crisis Ireland s debt-to-gdp ratio: percent percent percent percent Spain s debt-to-gdp ratio: percent percent percent percent 3
4 Gross Public Debt, (% of GDP) Austria Belgium Denmark n.a Finland n.a France Germany Greece Ireland n.a Italy Japan Netherlands Norway Spain n.a Sweden UK USA Source: OECD Economic Outlook
5 5
6 3. Why Did the Debt-to-GDP Ratios in Ireland and Spain Rise So Much with the Onset of the Crisis? Both countries had real estate booms that were financed by loans from banks and other financial institutions. Banks make money by lending long-term and borrowing short-term. This is because the yield curve is usually upward sloping. The interest banks charge on mortgages is higher than the interest they pay on their short-term borrowing. In the years before the crisis there was a big increase in the amount of short-term debt held by banks and other financial institutions in Ireland and Spain. 6
7 With the start of the financial crisis liquidity in the short-term credit market dried up (due to a big increase in perceived counterparty default risk). Banks were no longer able to rollover their debts. The Irish and Spanish governments were forced to lend to the banks to prevent them defaulting. The banks debts were more or less taken over by the government. At the same time the housing markets fell in Ireland and Spain, and mortgage holders started to default on their loans. The value of the banks assets fell. 7
8 Note: if the bank loans are still sound then the banks are facing a liquidity problem. If enough mortgage holders default and the value of the houses falls below the value of the mortgages, then the banks may become insolvent. This is a key difference between countries that experienced housing booms and busts and those that did not. In most other countries the financial crisis created a temporary liquidity crisis for banks. In countries that had housing busts, the banks may have also become insolvent. The government was forced to bail them out. If not, one bank collapsing can then trigger collapses at other banks endangering the whole financial system. 8
9 A similar thing happened in Iceland, except that it was aggressive international expansion of the banking sector rather than a housing bust that caused the problem. The combination of the financial crisis and housing bust triggered bad recessions in Ireland and Spain. (i) Banks stopped lending, causing a credit crunch. Hence investment fell. (ii) The fall in house prices reduced household wealth and hence consumption fell. 9
10 (iii) Government debt rose dramatically as a result of bailing out banks, and due to the fall in tax revenue from rising unemployment and falling house purchases. Lenders became concerned about the Government s ability to service its debt, forcing a tightening of fiscal policy. Tightening fiscal policy made the recession worse. The combination of (i), (ii) and (iii) caused a big fall in aggregate demand which sent both economies into recession. This in turn acted to further reduce tax revenue and increase government expenditure (as unemployment rose) putting still more pressure on the government budget. 10
11 As GDP fell this also worsened the debt-to-gdp ratio. During the boom, Ireland and Spain were also becoming less competitive since wages were rising too fast. This helped make the recession even worse when the boom ended. 4. How Did Greece and Italy Accumulate So Much Debt Before the Crisis? Entry into the Eurozone allowed member countries to issue Euro denominated bonds. The market decided that Greek/Italian bonds denominated in Euros were less risky than Greek/Italian bonds denominated in Drachma/Lira. 11
12 Hence Greece and Italy were able to borrow more and at a lower interest rate than they would have been otherwise able to. The markets ignored two risks associated with buying Greek bonds. (i) The Government could default on its bonds. (ii) It could be forced out of the Eurozone and then convert these bonds into Drachma at a very devalued rate. 12
13 5. The Benefits of a Common Currency (i) Elimination of transaction costs These are the costs incurred buying and selling foreign exchange. The EU Commission has estimated that the elimination of transaction costs as a result of monetary union save firms and households about 13 to 20 billion Euros a year This is between 0.25 and 0.5 percent of EU GDP. Banks lose out about 5 percent of bank revenue prior to monetary union came from fees charged for foreign exchange transactions. 13
14 Even with monetary union, bank transfers between Euro-zone countries are more expensive than within country transfers. The European Commission is pressuring the banks to eliminate these differences. (ii) Greater price transparency Differences in prices across Eurozone countries are more transparent after monetary union. This might stimulate greater competition and hence lower prices. In 2000, the differences across countries were much larger than within countries See Table
15 15
16 According to Wolszczak-Derlacz (2006), this gap has not narrowed since 2000 see Figure 3.1. This may be because retail markets across Euro-zone countries are still quite segmented. For example, a few supermarket chains dominate in each country. It can be difficult for a new chain to establish itself. Also transport costs make it hard for consumers to exploit arbitrage opportunities. (iii) Reduced uncertainty Uncertainty about future real exchange rates may discourage investment and attempts by firms to establish market share in other countries. 16
17 17
18 A significant appreciation of the domestic currency can impose large costs on exporters. The large appreciation of the US dollar from hurt a number of exporting US firms, and led to some closures. Example: Suppose exchange rate changed from 1 dollar = 1 Euro to 1 dollar = 1.5 Euros. If a US firm wants to receive $100 for each unit of a good sold in Europe, after the appreciation of the dollar it must raise its Euro price from 100 to 150. This will cause it to lose market share, which will reduce profits. If it keeps the price at 100 Euros, then the firm will only receive $67 for each unit sold. This will also reduce profits. 18
19 Monetary union however does not necessarily reduce systemic risk. A reduction in exchange rate risk could be countered by increased volatility in domestic output (since monetary policy can no longer be used to respond to country specific shocks). These shocks could hit either the goods or money market. The former (i.e., shocks to the goods market) are considered in Figure B6.1. Under monetary union, a rightward shift of the IS curve causes an increased demand for goods. More money flows into the country from the rest of the union to meet this demand. This shifts the LM curve to the right. 19
20 With a freely floating exchange rate, the rightward shift of the IS curve exerts upward pressure on the interest rate. The rise in output is dampened by the fall in investment and appreciation of the currency triggered by the rise in interest rates. Conclusion: fluctuations in output are bigger under monetary union. 20
21 21
22 The latter (i.e., shocks to the money market) are considered in Figure B6.2. Under monetary union, a rightward shift of the LM curve causes an outflow of money, since the amount of money circulating exceeds the demand for goods. This shifts the LM curve back to the left. With a freely floating exchange rate, the rightward shift of the LM curve causes the interest rate to fall, which stimulates investment and causes the currency to depreciate increasing net exports. Conclusion: fluctuations in output are smaller under monetary union. 22
23 23
24 (iv) Increased trade between the member countries Monetary union has stimulated greater integration of financial markets and institutions across the member countries. This should help increase trade between the member countries. Current estimates are that monetary union has boosted trade between member countries by between 5 and 20 percent. Increased trade allows each country to exploit its comparative advantages. This should benefit all countries in the union. 24
25 (v) Monetary union helps create an environment conducive to monetary union Frankel and Rose have argued that monetary union stimulates trade between the member countries which tends to harmonize their business cycles and make them less likely to be hit by asymmetric shocks. 25
26 7. Comparing Costs and Benefits The benefits of monetary union tend to rise with the level of trade with other countries in the union. Assuming that increased trade causes increased symmetry (see Figure 2.1), then the costs of monetary union decrease with the level of within union trade. In this case, whether monetary union is desirable for a particular country may depend on the level of within union trade that results (if more trade implies more symmetry). See Figure
27 27
28 The benefits of monetary union (through lower transaction costs and lower exchange rate uncertainty) increase with the amount of trade between countries in the union. Hence the benefit curve is upward sloping. The costs of monetary union decrease with more trade (assuming trade makes the countries more symmetric). Hence the cost curve is downward sloping. 28
29 29
30 Estimates of within union trade for the EU countries are provided in Table 4.1. The results suggest that monetary union is desirable for Belgium, the Czech Republic, and the Netherlands, but less so for Italy, Spain, the UK and Greece. Note: there are other advantages of monetary union, such as tapping into the ECB s inflation fighting credibility. This alone at the time seemed like a sufficient justification for Italy and Greece to join the monetary union. The gains though are illusory if wages continue rising. In this case the country becomes gradually less competitive leading to recession and unemployment. 30
31 31
32 Figure 4.4 provides an alternative way of comparing the desirability of monetary union. The desirability of monetary union is an increasing function of: (a) the symmetry of the member countries (since this reduces the likelihood of the countries being hit by asymmetric shocks). (b) the flexibility of the labour markets of the member countries (e.g. wage flexibility and mobility of labour). Greater flexibility reduces the impact of asymmetric shocks. It follows that we can construct a downward sloping frontier in flexibility-symmetry space, such that groups of countries above the frontier are optimal currency areas, while those below the frontier are not. 32
33 33
34 Figure 4.4 implies that a lack of symmetry can be compensated for by greater labour market flexibility. The current consensus is that a subset of the EU (e.g., Germany, France, Belgium, the Netherlands, Luxembourg and Austria) are an optimal currency area (OCA), the EU-25 countries are not an OCA. Further eastward expansion of the EU will move it further away from an OCA. Most economists believe that the US is an OCA, although this is more due to labour market flexibility than symmetry. For example, car production is centred on Michigan. This is due to economies of scale (as argued by Krugman). 34
35 The OPEC oil shocks of the 1970s caused recessions in the US. In both cases, Michigan was hit worse than the rest of the US (see Figure 4.5). A major part of Michigan s recovery (relative to the rest of the US) was driven by emigration from Michigan to the rest of the US (see Figure 4.7). By contrast, Belgium s recovery from recession over the same period (relative to the rest of the EU) was driven by a depreciation of the Belgian franc (see Figures 4.6 and 4.8). 35
36 36
37 37
38 38
39 39
40 We can also measure the desirability of monetary union as a function of trade integration and symmetry. The desirability of monetary union is an increasing function of: (a) the symmetry of the member countries (since this reduces the likelihood of the countries being hit by asymmetric shocks). (b) the extent of trade integration. This is because greater integration increases the gains from lower transaction costs and avoiding exchange rate uncertainty. The OCA frontier is again downward sloping. Groups of countries above the frontier are OCAs (see Figure 4.9). 40
41 41
42 If increased integration leads to increased symmetry, then the Eurozone countries will move to the right over time in Figure 4.9. hence even if they are not an OCA to begin with, they may become so over time. If instead the Krugman view is correct, then trade integration will cause the Eurozone to diverge from an OCA over time (see Figure 4.10). 42
43 43
44 8. Other Monetary Unions (i) Enlargement of the EU Most of the new entrants to the EU are more integrated with it than are Denmark, Sweden and the UK (the three older members not in the Eurozone) see Figure Figure 4.12 plots the correlation between demand and supply shocks for various countries relative to the Eurozone. The low or negative demand shock correlations for Slovakia, Slovenia, the Czech Republic, the UK, Latvia and Lithuania may be attributable to each country following its own monetary policy. 44
45 45
46 46
47 These demand shock correlations could well change sign if these countries joined the Eurozone. (ii) Monetary union in Latin America Within region exports as a share of GDP in Latin America are compared with the Euro-zone in Figure The very low within region trade levels suggest that monetary union would not be a good idea. 47
48 48
49 Also, there can be no presumption that a Latin American central bank would have any more inflation-fighting credibility than the existing central banks in the region. There is no equivalent of Germany in the region. Monetary union in Latin America does not look like a good idea. Some Latin American countries have considered monetary union with the US in the form of dollarization (i.e., unilateral adoption of the US dollar). 49
50 (iii) Monetary union in East Asia The within region trade in East Asia is comparable with that in the Euro-zone (see Figure 4.17). The symmetry of the shocks hitting East Asian countries are also comparable to those hitting the Eurozone countries (see Figures 4.18 and 4.19). East Asia does look like a potential candidate for monetary union. Increasingly, the countries in the region however would fear domination by China. Hence monetary union is unlikely in the near future. 50
51 51
52 52
53 53
26/10/2016. The Euro. By 2016 there are 19 member countries and about 334 million people use the. Lithuania entered 1 January 2015
The Euro 1 The Economics of the Euro 2 The History and Politics of the Euro Prepared by: Fernando Quijano Dickinson State University 1of 88 In 1961 the economist Robert Mundell wrote a paper discussing
More informationDG TAXUD. STAT/11/100 1 July 2011
DG TAXUD STAT/11/100 1 July 2011 Taxation trends in the European Union Recession drove EU27 overall tax revenue down to 38.4% of GDP in 2009 Half of the Member States hiked the standard rate of VAT since
More informationEMPLOYMENT RATE IN EU-COUNTRIES 2000 Employed/Working age population (15-64 years)
EMPLOYMENT RATE IN EU-COUNTRIES 2 Employed/Working age population (15-64 years EU-15 Denmark Netherlands Great Britain Sweden Portugal Finland Austria Germany Ireland Luxembourg France Belgium Greece Spain
More informationLecture 7: Intermediate macroeconomics, autumn Lars Calmfors
Lecture 7: Intermediate macroeconomics, autumn 2008 Lars Calmfors 1 EMU Economic and Monetary Union An old idea in the European Union 1989: Delors report 1991: Maastricht treaty 1997: Stability pact Eleven
More informationRanking Country Page. Category 1: Countries with positive CEP Default Index and positive NTE. 1 Estonia 1. 2 Luxembourg 2.
Overview: Single Results of Euro Countries Ranking Country Page Category 1: Countries with positive CEP Default Index and positive NTE 1 Estonia 1 2 Luxembourg 2 3 Germany 3 4 Netherlands 4 5 Austria 5
More informationILO World of Work Report 2013: EU Snapshot
Greece Spain Ireland Poland Belgium Portugal Eurozone France Slovenia EU-27 Cyprus Denmark Netherlands Italy Bulgaria Slovakia Romania Lithuania Latvia Czech Republic Estonia Finland United Kingdom Sweden
More informationEMPLOYMENT RATE Employed/Working age population (15-64 years)
1 EMPLOYMENT RATE 1980-2003 Employed/Working age population (15-64 years 80 % Finland (Com 75 70 65 60 EU-15 Finland (Stat. Fin. 55 50 80 82 84 86 88 90 92 94 96 98 00 02 9.9.2002/SAK /TL Source: European
More informationOECD III: EMU. Gavin Cameron Lady Margaret Hall. Michaelmas Term 2004
OECD III: EMU Gavin Cameron Lady Margaret Hall Michaelmas Term 2004 the Trinity Free Capital Mobility USA, Japan ERM, NICs, EMU Independent domestic monetary policy Stable (Fixed) Exchange Rate Bretton
More informationConsumer credit market in Europe 2013 overview
Consumer credit market in Europe 2013 overview Crédit Agricole Consumer Finance published its annual survey of the consumer credit market in 28 European Union countries for seven years running. 9 July
More informationThe International Monetary System
INTERNATIONAL FINANCIAL MANAGEMENT Fourth Edition EUN / RESNICK The International Monetary System 2 Chapter Two INTERNATIONAL Chapter Objective: FINANCIAL MANAGEMENT This chapter serves to introduce the
More informationEUROPA - Press Releases - Taxation trends in the European Union EU27 tax...of GDP in 2008 Steady decline in top corporate income tax rate since 2000
DG TAXUD STAT/10/95 28 June 2010 Taxation trends in the European Union EU27 tax ratio fell to 39.3% of GDP in 2008 Steady decline in top corporate income tax rate since 2000 The overall tax-to-gdp ratio1
More informationOVERVIEW. The EU recovery is firming. Table 1: Overview - the winter 2014 forecast Real GDP. Unemployment rate. Inflation. Winter 2014 Winter 2014
OVERVIEW The EU recovery is firming Europe's economic recovery, which began in the second quarter of 2013, is expected to continue spreading across countries and gaining strength while at the same time
More informationMonetary Integration
Monetary Integration By Michael Möhnle Table of Contents 1. 6-Stages of Economic Integration 2. International Monetary Integration - Bretton Woods 3. European Monetary Integration 4. European (Economic
More informationFiscal Federalism - some thoughts
Fiscal Federalism - some thoughts John Hassler Swedish Fiscal Policy Council and IIES Why federal fiscal policy? 1. Financing union-wide public goods 2. Means to foster integration 3. Insurance against
More informationIZMIR UNIVERSITY of ECONOMICS
IZMIR UNIVERSITY of ECONOMICS Department of International Relations and the European Union TURKEY EU RELATIONS ( EU308) FOREIGN DIRECT INVESTMENT IN THE EUROPEAN UNION AND TURKEY Prepared By: Büke OŞAFOĞLU
More informationOpen Economy AS/AD: Applications
Open Economy AS/AD: Applications Econ 309 Martin Ellison UBC Agenda and References Trilemma Jones, chapter 20, section 7 Euro crisis Jones, chapter 20, section 8 Global imbalances Jones, chapter 29, section
More informationStudy Questions (with Answers) Lecture 17 European Monetary Unification and the Euro
Study Questions (with Answers) Page 1 of 4(5) Study Questions (with Answers) Lecture 17 pean Monetary Unification and the Part 1: Multiple Choice Select the best answer of those given. 1. The is a. The
More informationConsumer Credit. Introduction. June, the 6th (2013)
Consumer Credit in Europe at end-2012 Introduction Crédit Agricole Consumer Finance has published its annual survey of the consumer credit market in 27 European Union countries (EU-27) for the sixth year
More informationIrish Economy and Growth Legal Framework for Growth and Jobs High Level Workshop, Sofia
Irish Economy and Growth Legal Framework for Growth and Jobs High Level Workshop, Sofia Diarmaid Smyth, Central Bank of Ireland 18 June 2015 Agenda 1 Background to Irish economic performance 2 Economic
More informationWhat Governance for the Eurozone? Paul De Grauwe London School of Economics
What Governance for the Eurozone? Paul De Grauwe London School of Economics Outline of presentation Diagnosis od the Eurocrisis Design failures of Eurozone Redesigning the Eurozone: o Role of central bank
More informationECFIN/C-1 Fourth quarter 2000
ECFIN/C-1 Fourth quarter 2000 ECFIN/44/4/00-EN This document exists in English only. European Communities, 2001. MAIN FEATURES During the fourth quarter of 2000, the euro appreciated against the US dollar,
More informationEU BUDGET AND NATIONAL BUDGETS
DIRECTORATE GENERAL FOR INTERNAL POLICIES POLICY DEPARTMENT ON BUDGETARY AFFAIRS EU BUDGET AND NATIONAL BUDGETS 1999-2009 October 2010 INDEX Foreward 3 Table 1. EU and National budgets 1999-2009; EU-27
More informationEMPLOYMENT RATE Employed/Working age population (15 64 years)
EMPLOYMENT RATE 198 26 Employed/Working age population (15 64 years 8 % Finland 75 EU 15 EU 25 7 65 6 55 5 8 82 84 86 88 9 92 94 96 98 2 4** 6** 14.4.25/SAK /TL Source: European Commission 1 UNEMPLOYMENT
More informationPrevisions Macroeconòmiques. Macroeconomic scenario for the Catalan economy 2017 and June 2017
PM Previsions Macroeconòmiques Macroeconomic scenario for the Catalan economy 2017 and 2018 June 2017 Previsions macroeconòmiques Macroeconomic scenario for the Catalan economy June 2017 ISSN: 2013-2182
More informationThe intergenerational divide in Europe. Guntram Wolff
The intergenerational divide in Europe Guntram Wolff Outline An overview of key inequality developments The key drivers of intergenerational inequality Macroeconomic policy Orientation and composition
More informationSTAT/12/ October Household saving rate fell in the euro area and remained stable in the EU27. Household saving rate (seasonally adjusted)
STAT/12/152 30 October 2012 Quarterly Sector Accounts: second quarter of 2012 Household saving rate down to 12.9% in the euro area and stable at 11. in the EU27 Household real income per capita fell by
More informationGovernor of the Bank of Latvia
Lessons from Latvia s internal adjustment strategy Ilmārs Rimšēvičs Governor of the Bank of Latvia September 4, 2012 Presentation outline Overheating of Latvia s economy Expansionary consolidation Lessons
More informationThe Swedish approach to capital requirements in CRD IV
The Swedish approach to capital requirements in CRD IV State Secretary Johanna Lybeck Lilja The aim of capital requirements Enhancing growth creating potential of a integrated, stable financial system
More informationLecture 6: Intermediate macroeconomics, autumn Lars Calmfors
Lecture 6: Intermediate macroeconomics, autumn 2009 Lars Calmfors 1 Topics Systems of fixed exchange rates Interest rate parity under a fixed exchange rate Stabilisation policy under a fixed exchange rate
More informationGrowth in OECD Unit Labour Costs slows to 0.4% in the third quarter of 2016
Growth in OECD Unit Labour Costs slows to.4% in the third quarter of 26 Growth in unit labour costs (ULCs) in the OECD area slowed to.4% in the third quarter of 26 (compared with.6% in the previous quarter)
More informationLive Long and Prosper? Demographic Change and Europe s Pensions Crisis. Dr. Jochen Pimpertz Brussels, 10 November 2015
Live Long and Prosper? Demographic Change and Europe s Pensions Crisis Dr. Jochen Pimpertz Brussels, 10 November 2015 Old-age-dependency ratio, EU28 45,9 49,4 50,2 39,0 27,5 31,8 2013 2020 2030 2040 2050
More informationEU Pension Trends. Matti Leppälä, Secretary General / CEO PensionsEurope 16 October 2014 Rovinj, Croatia
EU Pension Trends Matti Leppälä, Secretary General / CEO PensionsEurope 16 October 2014 Rovinj, Croatia 1 Lähde: World Bank 2 Pension debt big (implicit debt, % of GDP, 2006) Source:Müller, Raffelhüschen
More informationClasses and Lectures
Classes and Lectures There are no classes in week 24, apart from the cancelled ones You ve already had 9 classes, as promised, and no doubt you re keen to revise Answers for Question Sheet 5 are on the
More informationThoughts on bubbles and the macroeconomy. Gylfi Zoega
Thoughts on bubbles and the macroeconomy Gylfi Zoega The bursting of the stock-market bubble in Iceland and the fall of house prices and the collapse of the currency market caused the biggest financial
More informationMonetary Policy in Euroland
Monetary Policy in Euroland Asymmetric shocks Perfect asymmetry : positive shock in one country is offset by a negative shock in the other country. The ECB, which is concerned with price stability and
More informationChart pack to council for cooperation on macroprudential policy
Chart pack to council for cooperation on macroprudential policy Contents List of charts... 3 Macro and macro-financial setting... 5 Swedish macroeconomic setting... 5 Foreign macroeconomic setting... Macro-financial
More informationDYNAMICS OF BUDGETARY REVENUE IN THE CONDITIONS OF ROMANIAN INTEGRATION IN THE EUROPEAN UNION - A CONSEQUENTLY OF THE TAX AND HARMONIZATION POLICY
260 Finance Challenges of the Future DYNAMICS OF BUDGETARY REVENUE IN THE CONDITIONS OF ROMANIAN INTEGRATION IN THE EUROPEAN UNION - A CONSEQUENTLY OF THE TAX AND HARMONIZATION POLICY Mădălin CINCĂ, PhD
More informationTAX POLICY CENTER BRIEFING BOOK. Background. Q. What are the sources of revenue for the federal government?
What are the sources of revenue for the federal government? FEDERAL BUDGET 1/4 Q. What are the sources of revenue for the federal government? A. About 48 percent of federal revenue comes from individual
More informationT5-Europe The Jus Semper Global Alliance 01/09/16 1 6
Table-T5 Living-Wage-Gap and Equalisation analysis (vis-à-vis the U.S.) for all employed in the manufacturing sector in PPP for private consumption terms 1996-2015 (Europe) Beginning with the 2012 living-wage
More informationThe Brussels Economic Forum
The Brussels Economic Forum What kind of policies should the new Member States apply to optimise their speed of convergence? Banco de Portugal VÍTOR CONSTÂNCIO Brussels, 23d of April 24 I. INTRODUCTION
More informationEcon 340. Recall Macro from Econ 102. Recall Macro from Econ 102. Recall Macro from Econ 102. Recall Macro from Econ 102
Econ 34 Lecture 5 International Macroeconomics Outline: International Macroeconomics Recall Macro from Econ 2 Aggregate Supply and Demand Policies Effects ON the Exchange Expansion Interest Rate Depreciation
More informationCourthouse News Service
14/2009-30 January 2009 Sector Accounts: Third quarter of 2008 Household saving rate at 14.4% in the euro area and 10.7% in the EU27 Business investment rate at 23.5% in the euro area and 23.6% in the
More informationEurozone. EY Eurozone Forecast September 2014
Eurozone EY Eurozone Forecast September 2014 Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland Italy Latvia Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Outlook for
More information: Monetary Economics and the European Union. Lecture 5. Instructor: Prof Robert Hill. Inflation Targeting
320.326: Monetary Economics and the European Union Lecture 5 Instructor: Prof Robert Hill Inflation Targeting Note: The extra class on Monday 11 Nov is cancelled. This lecture will take place in the normal
More informationReport Penalties and measures imposed under the UCITS Directive in 2016 and 2017
Report Penalties and measures imposed under the Directive in 206 and 207 4 April 209 ESMA34-45-65 4 April 209 ESMA34-45-65 Table of Contents Executive Summary... 3 2 Background and relevant regulatory
More informationWhat does Western Economic Crisis Mean for South Africa?
What does Western Economic Crisis Mean for South Africa? Seeraj Mohamed Corporate Strategy and Industrial Development Research Programme University of the Witwatersrand Context for Europe s Crisis Global
More informationJanuary 2005 Euro-zone external trade deficit 2.2 bn euro 14.0 bn euro deficit for EU25
42/2005-23 March 2005 January 2005 Euro-zone external trade deficit 2.2 14.0 deficit for EU25 The first estimate for euro-zone 1 trade with the rest of the world in January 2005 was a 2.2 billion euro
More informationMarch 2005 Euro-zone external trade surplus 4.2 bn euro 6.5 bn euro deficit for EU25
STAT/05/67 24 May 2005 March 2005 Euro-zone external trade surplus 4.2 6.5 deficit for EU25 The first estimate for euro-zone 1 trade with the rest of the world in March 2005 was a 4.2 billion euro surplus,
More information19.2 Exchange Rates in the Long Run Introduction 1/24/2013. Exchange Rates and International Finance. The Nominal Exchange Rate
Chapter 19 Exchange Rates and International Finance By Charles I. Jones International trade of goods and services exceeds 20 percent of GDP in most countries. Media Slides Created By Dave Brown Penn State
More informationHousehold Balance Sheets and Debt an International Country Study
47 Household Balance Sheets and Debt an International Country Study Jacob Isaksen, Paul Lassenius Kramp, Louise Funch Sørensen and Søren Vester Sørensen, Economics INTRODUCTION AND SUMMARY What are the
More informationMacroeconomic scenarios for skill demand and supply projections, including dealing with the recession
Alphametrics (AM) Alphametrics Ltd Macroeconomic scenarios for skill demand and supply projections, including dealing with the recession Paper presented at Skillsnet technical workshop on: Forecasting
More informationEurozone. EY Eurozone Forecast September 2014
Eurozone EY Eurozone Forecast September 2014 Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland Italy Latvia Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Outlook for
More informationAugust 2005 Euro-zone external trade deficit 2.6 bn euro 14.2 bn euro deficit for EU25
STAT/05/132 20 October 2005 August 2005 Euro-zone external trade deficit 2.6 14.2 deficit for EU25 The first estimate for euro-zone 1 trade with the rest of the world in August 2005 was a 2.6 billion euro
More informationApproach to Employment Injury (EI) compensation benefits in the EU and OECD
Approach to (EI) compensation benefits in the EU and OECD The benefits of protection can be divided in three main groups. The cash benefits include disability pensions, survivor's pensions and other short-
More informationPerspectives on the U.S. Economy
Perspectives on the U.S. Economy Presentation for Irish Institute Seminar, April 14, 2008 Bob Murphy Department of Economics Boston College Three Perspectives 1. Historical Overview of U.S. Economic Performance
More informationCRISIS MANAGEMENT AND ECONOMIC GROWTH IN THE EUROZONE. Paul De Grauwe (LSE) Yuemei Ji (Brunel University)
CRISIS MANAGEMENT AND ECONOMIC GROWTH IN THE EUROZONE Paul De Grauwe (LSE) Yuemei Ji (Brunel University) Stagnation in Eurozone Figure 1: Real GDP in Eurozone, EU10 and US (prices of 2010) 135 130 125
More informationGREEK ECONOMIC OUTLOOK
CENTRE OF PLANNING AND ECONOMIC RESEARCH Issue 29, February 2016 GREEK ECONOMIC OUTLOOK Macroeconomic analysis and projections Public finance Human resources and social policies Development policies and
More informationWorld Economic Outlook Central Europe and Baltic Countries
World Economic Outlook Central Europe and Baltic Countries Presentation by Susan Schadler and Christoph Rosenberg September 5 World growth returns to trend. (World real GDP growth, annual percent change)
More informationEU-28 RECOVERED PAPER STATISTICS. Mr. Giampiero MAGNAGHI On behalf of EuRIC
EU-28 RECOVERED PAPER STATISTICS Mr. Giampiero MAGNAGHI On behalf of EuRIC CONTENTS EU-28 Paper and Board: Consumption and Production EU-28 Recovered Paper: Effective Consumption and Collection EU-28 -
More informationBurden of Taxation: International Comparisons
Burden of Taxation: International Comparisons Standard Note: SN/EP/3235 Last updated: 15 October 2008 Author: Bryn Morgan Economic Policy & Statistics Section This note presents data comparing the national
More informationThe macroeconomic effects of a carbon tax in the Netherlands Íde Kearney, 13 th September 2018.
The macroeconomic effects of a carbon tax in the Netherlands Íde Kearney, th September 08. This note reports estimates of the economic impact of introducing a carbon tax of 50 per ton of CO in the Netherlands.
More informationUnderstanding the World Economy. Fiscal policy. Nicolas Coeurdacier Lecture 9
Understanding the World Economy Fiscal policy Lecture 9 Nicolas Coeurdacier nicolas.coeurdacier@sciencespo.fr Lecture 9 : Fiscal policy 1. Public spending 2. Taxation 3. Debt and deficits 4. Fiscal policy
More informationEconomic Performance. Lessons from the past and a guide for the future Björn Rúnar Guðmundson, Director
Economic Performance Lessons from the past and a guide for the future Björn Rúnar Guðmundson, Director Analysis of economic performance Capital and labour: The raw ingredients in economic development However,
More informationGREEK ECONOMIC OUTLOOK
CENTRE OF PLANNING AND ECONOMIC RESEARCH Issue 27, June 2015 GREEK ECONOMIC OUTLOOK Macroeconomic analysis and projections Public finance Human resources and social policies Development policies and sectors
More informationThe European Monetary & Economic Union: The euro. Maria Lorca-Susino, Ph.D. University of Miami
The European Monetary & Economic Union: The euro Maria Lorca-Susino, Ph.D. University of Miami The EU and The Euro Copenhagen Criteria defines whether a country is eligible to join the EU: Institutions
More informationOverview of EU public finances
6 volume 17, 12/29B I Overview of EU public finances PRE-CRISIS DEVELOPMENTS Public finance developments in the EU up to 28 can be divided into three stages: In 1997, the Stability and Growth Pact entered
More informationPENSIONS IN OECD COUNTRIES: INDICATORS AND DEVELOPMENTS
PENSIONS IN OECD COUNTRIES: INDICATORS AND DEVELOPMENTS Marius Lüske Directorate for Employment, Labour and Social Affairs, OECD Lisbon, 28.09.2018 Marius.LUSKE@oecd.org www.oecd.org/els OUTLINE Talk based
More informationUC Berkeley Fall Final examination SOLUTION SHEET
Pierre-Olivier Gourinchas Econ182 Department of Economics International Monetary Economics UC Berkeley Fall 2004 Final examination SOLUTION SHEET WRITE YOUR ANSWERS TO QUESTION 1 ON PAGES 2-5. 1. [30 points,
More information5. An increase in government spending is represented as a:
Romer Section 1 1. The IS curve represents combinations of Y and r that: a. are consistent with equilibrium in the money market. b. are consistent with equilibrium in the goods market. c. are positively
More informationSources of Government Revenue across the OECD, 2015
FISCAL FACT Apr. 2015 No. 465 Sources of Government Revenue across the OECD, 2015 By Kyle Pomerleau Economist Key Findings OECD countries rely heavily on consumption taxes, such as the value added tax,
More informationTHE EU S ECONOMIC RECOVERY PICKS UP MOMENTUM
THE EU S ECONOMIC RECOVERY PICKS UP MOMENTUM ECONOMIC SITUATION The EU economy saw a pick-up in growth momentum at the beginning of this year, boosted by strong business and consumer confidence. Output
More informationFinancial wealth of private households worldwide
Economic Research Financial wealth of private households worldwide Munich, October 217 Recovery in turbulent times Assets and liabilities of private households worldwide in EUR trillion and annualrate
More informationOther similar crisis: Euro, Emerging Markets
Session 15. Understanding Macroeconomic Crises. Mexican Crisis 1994-95 Other similar crisis: Euro, Emerging Markets Global Scenarios 2017-2021 The Mexican Peso Crisis in 1994: Background An economy that
More informationEurozone. EY Eurozone Forecast March 2014
Eurozone EY Eurozone Forecast March 2014 Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland Italy Latvia Luxembourg Malta Netherlands Portugal Slovakia Slovenia Spain Outlook for Germany
More informationRecent Macroeconomic and Monetary Developments in the Czech Republic and Outlook
Recent Macroeconomic and Monetary Developments in the Czech Republic and Outlook Miroslav Singer Governor, Czech National Bank FORECASTING DINNER 212, Czech CFA Society Prague, 22 February 212 M. Recent
More informationStudy Questions (with Answers) Lecture 15 International Macroeconomics
Study Questions (with Answers) Page 1 of 5 Study Questions (with Answers) Lecture 15 International Macroeconomics Part 1: Multiple Choice Select the best answer of those given. 1. If the aggregate supply
More information74 ECB THE 2012 MACROECONOMIC IMBALANCE PROCEDURE
Box 7 THE 2012 MACROECONOMIC IMBALANCE PROCEDURE This year s European Semester (i.e. the framework for EU policy coordination introduced in 2011) includes, for the first time, the implementation of the
More informationMain Economic & Financial Indicators Eurozone
Main Economic & Financial Indicators Eurozone 03 NOVEMBER 2015 AKIKO DARVELL ASSOCIATE ECONOMIST ECONOMIC RESEARCH OFFICE (LONDON) T +44-(0)20-7577-1591 E akiko.darvell@uk.mufg.jp The Bank of Tokyo-Mitsubishi
More informationStronger growth, but risks loom large
OECD ECONOMIC OUTLOOK Stronger growth, but risks loom large Ángel Gurría OECD Secretary-General Álvaro S. Pereira OECD Chief Economist ad interim Paris, 3 May Global growth will be around 4% Investment
More informationEconomic recovery and employment in the EU. Raymond Torres, Director, ILO Research Department
Economic recovery and employment in the EU Raymond Torres, Director, ILO Research Department Outline of presentation I. Situation in the EU versus Japan and the US II. Role of macroeconomic policies and
More informationProblems of monetary integration with the euro area:the case of Poland
Problems of monetary integration with the euro area:the case of Poland Prof. Andrzej Kaźmierczak, PhD Warsaw School of Economics Monetary Policy Council Member 1 Contents 1. Conditions of effective functioning
More informationWelcome to: International Finance
Welcome to: International Finance Introduction & International Monetary System Reading: Chapter 1 (p1-3) & Chapter 2 Why is International Finance Important? ٣ Why is International Finance Important? In
More information10: The European Monetary Union. Baldwin&Wyplosz The Economics of European Integration
10: The European Monetary Union The importance of credibility The theory OCA leaves out the issue of credibility in the conduct of monetary policy. Inflation depends on the expectations of economic agents
More informationAuditor s involvement in the contributions to the Single Resolution Fund. Providing assurance for 2014 and 2015 SURVEY
Auditor s involvement in the contributions to the Single Resolution Fund Providing assurance for 2014 and 2015 SURVEY AUDIT & ASSURANCE SEPTEMBER 2016 HIGHLIGHTS This survey demonstrates divergence across
More informationRestoring compe//veness: what has gone right, what has gone wrong?
Munich Economic Summit 2015 Compe//veness and Innova/on - May 2015 - Restoring compe//veness: what has gone right, what has gone wrong? Daniel Gros Munich, 21 May, 2015 Issue: Loss of compe//veness in
More informationName Organisation Date
European Public Leadership Driving Innovation In Construction and Operations Name Organisation Date Construction: declining productivity and low digitalisation Productivity Digitalisation Other non-farm
More informationQuarterly Financial Accounts Household net worth reaches new peak in Q Irish Household Net Worth
Quarterly Financial Accounts Q4 2017 4 May 2018 Quarterly Financial Accounts Household net worth reaches new peak in Q4 2017 Household net worth rose by 2.1 per cent in Q4 2017. It now exceeds its pre-crisis
More informationPrices and Output in an Open Economy: Aggregate Demand and Aggregate Supply
Prices and Output in an Open conomy: Aggregate Demand and Aggregate Supply chapter LARNING GOALS: After reading this chapter, you should be able to: Understand how short- and long-run equilibrium is reached
More informationLecture 1: Intermediate macroeconomics, autumn 2012
Lecture 1: Intermediate macroeconomics, autumn 2012 Lars Calmfors Literature: Mankiw, Chapters 3 and 5. 1 Topics 1. The relationship between saving, investment and the interest rate in a closed economy
More informationCECIMO Statistical Toolbox
European Association of the Machine Tool Industries Where manufacturing begins In this edition: 0 Introduction 1 Machine tool orders 1.1 CECIMO orders 1.2 Peter Meier s forecast CECIMO Statistical Toolbox
More informationQUARTERLY REPORT FOURTH QUARTER 1998
MAIN FEATURES The EU currencies appreciated by 5% against the US dollar but fell by 10.5% against the Japanese yen. These currency movements contributed to a small gain (about 1%) in the Union s average
More informationGrowth has peaked amidst escalating risks
OECD ECONOMIC OUTLOOK Growth has peaked amidst escalating risks 1 November 18 Ángel Gurría OECD Secretary-General Laurence Boone OECD Chief Economist http://www.oecd.org/eco/outlook/economic-outlook/ ECOSCOPE
More informationSummary. Economic Update 1 / 7 May Global Global GDP growth is forecast to accelerate to 2.9% in 2017 and maintain at 3.0% in 2018.
Economic Update Economic Update 1 / 7 Summary 2 Global Global GDP growth is forecast to accelerate to 2.9% in 2017 and maintain at 3.0% in 2018. 3 Eurozone The eurozone s recovery appears to strengthen
More informationHOUSEHOLDS LENDING MARKET IN THE ENLARGED EUROPE. Debora Revoltella and Fabio Mucci copyright with the author New Europe Research
HOUSEHOLDS LENDING MARKET IN THE ENLARGED EUROPE Debora Revoltella and Fabio Mucci copyright with the author New Europe Research ECFin Workshop on Housing and mortgage markets and the EU economy, Brussels,
More informationBank resolution in the Swedish context
Bank resolution in the Swedish context Hans Lindblad Director General UBS Annual Nordic Financial Services Conference Stockholm 8 september 2016 The Swedish economy is performing well GDP growth is strong
More informationSuggested answers to Problem Set 5
DEPARTMENT OF ECONOMICS SPRING 2006 UNIVERSITY OF CALIFORNIA, BERKELEY ECONOMICS 182 Suggested answers to Problem Set 5 Question 1 The United States begins at a point like 0 after 1985, where it is in
More informationNon-financial corporations - statistics on profits and investment
Non-financial corporations - statistics on profits and investment Statistics Explained Data extracted in May 2018. Planned article update: May 2019. This article focuses on investment and the distribution
More informationIn search of symmetry in the eurozone
In search of symmetry in the eurozone Paul De Grauwe 2 May 2012 One of the major problems of the eurozone is the divergence of the competitive positions that have built up since the early 2000s. This divergence
More informationThe Theory of Optimum Currency Areas: A Critique
The Theory of Optimum Currency Areas: A Critique 1 Reassessment of the OCA-theory I How important are asymmetries between countries, and how do they evolve over time? II Is national monetary policy (including
More informationMay 2012 Euro area international trade in goods surplus of 6.9 bn euro 3.8 bn euro deficit for EU27
108/2012-16 July 2012 May 2012 Euro area international trade in goods surplus of 6.9 3.8 deficit for EU27 The first estimate for the euro area 1 (EA17) trade in goods balance with the rest of the world
More information