[PDF] A Euro Area Wide Unemployment Insurance To Improve Macroeconomic Stability eBook

Author : Christian Kitzmueller
Publisher : GRIN Verlag
Page : 94 pages
File Size : 30,33 MB
Release : 2015-01-19
Category : Business & Economics
ISBN : 3656878455

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Master's Thesis from the year 2014 in the subject Economics - Finance, grade: 1, Donau-Universität Krems (Department for Management and Economics), course: International Financial Environment, language: English, abstract: The member states of the euro area have delegated the framing of monetary policy to a European Central Bank, while fiscal policy remains in responsibility of the national governments. In a monetary union, counter-cyclical fiscal policy can deliver only limited help to minimize the loss of monetary policy for adjustment to idiosyncratic shocks. As fiscal capacity at EMU level could transfer a significant part of the cyclical aspects of fiscal policy to the su¬pranational level and help the euro area members to focus their fiscal policy on structural balances. A variety of such risk-sharing mechanisms have been suggested in the academic literature. This Master’s Thesis evaluates the concept of euro area wide unemployment insurance, in comparison with cyclical transfers between the Eurozone members based on their business cycle position. The European unemployment insurance scheme surpasses other concepts with regards to the criteria distributional neutrality and transparency, both of which are essential in order to gain support of European policymakers and voters.

Author : Bertelsmann Stiftung
Publisher : Verlag Bertelsmann Stiftung
Page : 175 pages
File Size : 25,50 MB
Release : 2014-03-01
Category : Business & Economics
ISBN : 3867936013

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The recent euro crisis and the dramatic increase of unemployment in some euro countries have triggered a renewed interest in a fiscal capacity for the European Union to stabilize the economy of its member states. One of the proposed instruments is a common European unemployment insurance. In this book Sebastian Dullien from the HTW Berlin provides and evaluates a blueprint for such a scheme. Building on lessons from the unemployment insurance in the United States of America, he outlines how a European unemployment benefit scheme could be constructed to provide significant stabilization to national business cycles, yet without strongly extending social protection in Europe. Macroeconomic stabilization effects and payment flows between countries are simulated and options, potential pitfalls and existing concerns discussed.

Author : Miroslav Beblavý
Publisher :
Page : 20 pages
File Size : 30,77 MB
Release : 2017
Category :
ISBN : 9789279649684

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Most EU Member States are equipped with a set of powerful instruments to mitigate the effect of economic shocks on employment and income. With the inception of the Economic and Monetary Union (EMU), countries have lost control over their monetary policy, which instead is now managed centrally at the EMU-level. Fiscal policy, which comprises important automatic stabilisers such as a country’s unemployment insurance scheme, remained a national competence. EMU does not have such a stabilisation mechanism. In the past, EMU’s dual institutional architecture has been strongly criticised and many have called for reform, especially after the financial crisis starting in 2008 and the subsequent European debt crisis. This weakness was also underlined more recently, in the Five Presidents’ Report “Completing Europe’s Economic and Monetary Union” published in 2015, which proposed to introduce in the longer term a fiscal stabilisation function for EMU. Such automatic stabilisation at the euro area level should improve the cushioning of large macroeconomic shocks and thereby make EMU overall more resilient, provided a significant degree of economic and financial integration is achieved, together with further pooling of decision-making on national budgets and democratic accountability. The exact design of such euro area stabilisers requires more in-depth work on the legal, economic and political preconditions. A European unemployment benefits scheme (EUBS) has long been discussed as one possible response to stabilisation needs, among other potential stabilisation mechanisms. In 2014, the European Commission, following a request from the European Parliament, commissioned an investigation into the feasibility and added value of a European Unemployment Benefit Scheme as a fiscal stabilisation mechanism for the Eurozone (for more details on the project, see Annex 1). This study was conducted by a consortium led by the Centre for European Policy Studies (CEPS) and examined 18 EUBS variants (on which more details are provided in Annex 2). It does not represent the Commission’s position. A comparative assessment of the EUBS with other stabilisers, however, was beyond the scope of this study.

Author : Mr.John C Bluedorn
Publisher : International Monetary Fund
Page : 31 pages
File Size : 44,22 MB
Release : 2019-06-17
Category : Business & Economics
ISBN : 149831970X

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Cross-country differences in economic resilience—in an economy’s ability to withstand and adjust to shocks—remain significant in the euro area. In part, the differences reflect the lack of a national nominal exchange rate as a mechanism to adjust to shocks. The IMF staff has argued that union-wide architectural changes such as the banking union, the capital markets union, and a central fiscal capacity can help foster greater international risk sharing. Yet even these changes cannot insure against all shocks. National policies thus have a vital role to play. This IMF staff discussion note analyzes how national structural policies can help euro area countries better deal with economic shocks. Using a mix of empirical and modeling approaches, the note finds that growth-enhancing reforms to labor and product market regulations, tailored to country-specific circumstances, would help individual euro area economies weather adverse shocks. Higher-quality insolvency regimes are associated with more efficient factor reallocation following a shock. The note also finds that structural and cyclical policies interact. Greater rigidities make economies more fragile, putting a higher burden on fiscal policy. This is especially true for members of a monetary union. Countries should build fiscal space in good times and tackle rigidities, reducing their need for countercyclical policies in bad times while making countercyclical policies more effective when deployed.

Author : Daniel Pérez del Prado
Publisher :
Page : pages
File Size : 21,67 MB
Release : 2020
Category :
ISBN :

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This paper is spelling out a compromise proposal which on the one hand would provide the stabilization sought by proponents of a EUBS, but on the other hand addresses some of the most important concerns brought forward against a EUBS. Before going into the details of such a proposal, it is necessary to define the economic aim of such a scheme. The aim of the proposal discussed here is two-fold: It should first lead to cyclical stabilization both at a country-level as well as an EMU-wide level by influencing the pattern of national aggregate demand over time. Second, in the case of very large shocks to individual countries, it is supposed to soften the impact of this shock. What the proposal is not supposed (or able) to do, however, is to provide long-term convergence of incomes in different euro area countries. Our proposal borrows elements from a number of published proposals, among others those from the CEPS (Beblavý and Lenaerts, 2017) and the Italian treasury (Ministero dell'Economia e delle Finanze, August 2016, September 2016a, September 2016b). We believe, however, that the combination of the specific details is new and maximise the stabilization ability while minimizing concerns among euro area member states. Especially, our system has significant elements of self-insurance, by which countries are forced to make savings in good times for the case of a severe down-turn, combined with elements of joint insurance (or solidarity), by which countries especially hard hit by a crisis get support from a commonly financed fund.

Author :
Publisher :
Page : 207 pages
File Size : 49,28 MB
Release : 2014
Category :
ISBN : 9789282354568

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The European Parliament has called for a "social dimension" to the Economic and Monetary Union to tackle unemployment and restore growth following the recent economic crisis. Among various alternative options, automatic stabilisers could potentially be a means of stabilising the Eurozone, while at the same time addressing social problems associated with the financial crisis. This study explores the prospects for introducing an automatic stabilizer in the form of an Unemployment Insurance scheme for the euro area, which will provide the monetary union with greater stability in the medium and long term. Analysis of its potential benefits, had it existed during the recent crisis, shows that such a scheme would have reduced the fall in GDP in the most affected Member States by 71 billion euro in the period between 2009 and 2012.

Author : Mr.Jeffrey R. Franks
Publisher : International Monetary Fund
Page : 47 pages
File Size : 50,11 MB
Release : 2018-01-23
Category : Business & Economics
ISBN : 1484338499

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We examine economic convergence among euro area countries on multiple dimensions. While there was nominal convergence of inflation and interest rates, real convergence of per capita income levels has not occurred among the original euro area members since the advent of the common currency. Income convergence stagnated in the early years of the common currency and has reversed in the wake of the global economic crisis. New euro area members, in contrast, have seen real income convergence. Business cycles became more synchronized, but the amplitude of those cycles diverged. Financial cycles showed a similar pattern: sychronizing more over time, but with divergent amplitudes. Income convergence requires reforms boosting productivity growth in lagging countries, while cyclical and financial convergence can be enhanced by measures to improve national and euro area fiscal policies, together with steps to deepen the single market.

Author : Laurent Ferrara
Publisher : Springer
Page : 300 pages
File Size : 35,56 MB
Release : 2018-06-13
Category : Business & Economics
ISBN : 3319790757

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This book collects selected articles addressing several currently debated issues in the field of international macroeconomics. They focus on the role of the central banks in the debate on how to come to terms with the long-term decline in productivity growth, insufficient aggregate demand, high economic uncertainty and growing inequalities following the global financial crisis. Central banks are of considerable importance in this debate since understanding the sluggishness of the recovery process as well as its implications for the natural interest rate are key to assessing output gaps and the monetary policy stance. The authors argue that a more dynamic domestic and external aggregate demand helps to raise the inflation rate, easing the constraint deriving from the zero lower bound and allowing monetary policy to depart from its current ultra-accommodative position. Beyond macroeconomic factors, the book also discusses a supportive financial environment as a precondition for the rebound of global economic activity, stressing that understanding capital flows is a prerequisite for economic-policy decisions.