Fiscal multipliers in downturns and the effects of Euro Area consolidation

We estimate the impact of the fiscal consolidation actions in the Euro Area between 2011 and 2013 on output and public finances. We identify the discretionary fiscal consolidation effort based on new data by the European Commission. We combine these data with robust estimates from a rich meta-regression analysis on multipliers for various fiscal measures under different business cycle regimes. The frontloaded consolidation came at a considerable cost with an output loss of 7.7% and only a small gain to the primary balance of 0.2% of GDP. Backloading would have been much less costly due to lower multipliers.     

Fiscal discipline and exchange rates: Does politics matter?

We look at the effect of exchange rate regimes on fiscal discipline, taking into account the effect of underlying political conditions. We present a model where strong politics (defined as policymakers facing longer political horizon and higher cohesion) are associated with better fiscal performance, but fixed exchange rates may revert this result and lead to less fiscal discipline. We confirm these hypotheses through regression analysis performed on a panel sample covering 79 countries from 1975 to 2012. Our empirical results also show that the positive effect of strong politics on fiscal discipline is not enough to counter the negative impact of being at/moving to fixed exchange rates. Our results are robust to a number of sensitivity checks, including the use of different estimators, alternative proxies for fiscal discipline and sub-sample analysis.     

Inflation Dynamics in the Euro Area and the Role of Expectations

This paper examines the empirical performance of the New Keynesian Phillips curve and its hybrid specification in the euro area. Instead of imposing rational expectations, direct measures, i.e. OECD forecasts, are used as empirical proxies for economic agents’ inflation expectations. Real marginal costs are proxied by three alternative measures. The results suggest that once the rational expectations hypothesis is relaxed and directly measured expectations are used, the European inflation process can be modeled using the forward-looking New Keynesian Phillips curve. However, when allowing for possible non-rationalities in expectations, inflation can be modeled more accurately by the hybrid Phillips curve with the additional lagged inflation term. In this approach, output gap turns out to be at least as good as labor income share as a proxy for real marginal cost. Moreover, the inflation process seems to have become more forward-looking in the recent years of low and stable inflation.The views expressed are those of the author and do not necessarily reflect the views of the Bank of Finland. Special thanks are due to the editor, two anonymous referees, Juha Tarkka, Jouko Vilmunen and Matti Virén for useful comments. I am also grateful to David Mayes and Geoffrey Wood for helpful suggestions and to Heli Tikkunen for excellent research assistance. For their constructive comments, I would also thank participants in the conference on the Eurosystem Inflation Persistence Network at the ECB, which was held in Frankfurt in December 2003.     

Multiple Wage Bargaining Systems in the Single European Currency Area

Little attention in the EMU literature has been paid to the interaction between centralbank monetary rules and systems of collective wage bargaining. Analytically andempirically, coordinated wage bargaining systems respond with real wage restraintto non-accommodating monetary policy. Since wage determination is dominated bycollective bargaining in all the EMU member states and wage coordination within themember states has grown since 1980, this is a topic of potential importance. In particular, the replacement of the Bundesbank, directly targeting German inflation, by an ECB targeting European inflation has removed a major institutional support of wage restraint in Germany. The consequences of this for EMU are worked out under two scenarios, that inflation expectations will be generated by ECB monetary policy and that they will reflect German inflation outcomes. Possible institutional developments are discussed including government-union bargains. The Bundesbank has also played a major role in maintaining fiscal rectitude by targeting excess fiscal deficits in Germany: again its replacement by the ECB – targeting (if at all) European rather than German fiscal policy – loosens fiscal constraints. For underlying structural reasons therefore, it is possible that Germany and other EMU countries will move to a period of fiscal activism with wage restraint and low inflation purchased through social contract negotiations.     

Credit risk and sustainable debt: a model and estimations of why the Euro is stable in the long-run

Sustainable debt has become the key issue in rating of private as well as sovereign debtors. The problem of how to estimate sustainable debt has also been at the center of the debate over the Asian 1997–1998 financial crisis. If the external value of the currency depends on the external debt of a country, it is necessary to estimate the creditworthiness of the country. This paper studies credit risk and sustainable debt in the context of a dynamic model. For a dynamic growth model with an additional equation for the evolution of debt, we demonstrate of how to compute sustainable debt and creditworthiness. The model is estimated by employing time series data for the core countries of the Euro-area. The computations show that the Euro-area has large external assets. Using time series methods, the sustainability of external debt (assets) is estimated for those core countries of the Euro-area. Those estimations show that the Euro will be a stable currency in the long-run.     

Controllability and Persistence of Money Market Rates along the Yield Curve: Evidence from the Euro Area

Abstract. Controllability of longer‐term interest rates requires that the persistence of their deviations from the central bank's policy rate (i.e. the policy spreads) remains sufficiently low. This paper applies fractional integration techniques to assess the persistence of policy spreads of euro area money market rates along the yield curve. Independently from anticipated policy rate changes, there is strong evidence for all maturities that policy spreads exhibit long memory. We show that recent changes in the operational framework and the communication strategy of the European Central Bank (ECB) have significantly decreased the persistence of euro area policy spreads and, thus, have enhanced the ECB's influence on longer‐term money market rates.     

经济民主与社会主义市场经济的政治经济学含义:基于生产方式视角的分析

长期以来,作为社会主义市场经济的政治经济学含义的主要载体,经济民主的作用并不明显。出现这一现象的原因有二:在理论上,学界关于经济民主的论述强调生产关系视角而忽视生产方式视角。这样的把握方式导致经济民主体系处于悬置的状态;在现实中,将美国型市场经济视为唯一的参照系导致具有后福特主义色彩的经济民主无法进入政策议程。本文认为,以生产方式视角下的经济民主为中心,有选择、有秩序地推进经济民主是当下的现实选择。     

城市圈驱动区域经济增长的内在机制分析——以京津冀、长三角和珠三角城市圈为例

本文利用2003-2007年京津冀、长三角和珠三角城市圈所属省份的县市数据,使用断点回归法研究了城市圈的形成对城市圈整体经济绩效的影响以及城市圈驱动区域经济增长的机制和路径。由于城市圈基本围绕中心城市而建立,与中心城市的距离远近是决定一个地区是否属于城市圈范围的关键因素,因此可以通过比较城市圈临界线附近县市样本,进而判断城市圈形成与其他变量之间的因果关系。本文的实证结果表明,城市圈的形成主要通过蒂伯特选择机制和城市化进程的加快两个路径改善了城市圈区域的整体经济绩效;并且城市圈的形成对区域经济的影响具有异质性,北京未能发挥增长极的作用带动京津冀城市圈区域的经济增长,而长三角城市圈和珠三角城市圈地区则都受益于中心城市的辐射效应。     

Institutional Endowments and the Lithuanian Holding as Innovative Network: A Problem of Institutional Compatibility in the Baltic Sea Area

Post-socialist Lithuania had an undeveloped banking, a weak network commitment, and a resilient nomenklatura. An evolutionary Crossroads game shows that this made the nomenklatura bank convention stronger than the capitalist bank convention. In the nomenklatura bank convention, rent-seeking behavior decreases network commitment and thereby the effect of network complexity, thus making learning-by-financing weaker. This created a problem of institutional compatibility of bank-industry networks in the Baltic Sea Area during Lithuania's first voucher stage of privatization that might be overcome by foreign direct investment initiated in her second hard currency stage.     

粤港澳大湾区都市圈高速铁路供给机制与效率评估——以深惠汕捷运为例

随着粤港澳大湾区上升为国家战略,都市圈层面交通需求日益增加。都市圈高速铁路规划建设能促进城际社会经济联系,推动空间一体化。在交通强国背景下,如何创新都市圈跨市高速铁路供给模式,实施有效的治理体制,提升运营效率成为跨政区合作的焦点。在粤港澳大湾区,通过地方政府间合作,利用国家主导投资的高速铁路基础设施新增都市圈高铁服务——深惠汕捷运,成为都市圈高速铁路供给的新模式。深惠汕捷运是在厦深铁路的基础上增设区间服务,主要服务粤港澳大湾区深莞惠都市圈的跨市交通需求。为此,以深惠汕捷运为例,系统研究这种新模式的融资过程、治理机制与运营效率,有助于理解都市圈层面高速铁路供给机制。研究表明,深惠汕捷运的本质是地方政府联合向国家购买高速铁路服务,呈现较高的融资和运营效率,其顺利实施建立在跨市交通需求增长、上级政府有效干预、地方政府间高效协商和成本共享等方面,这能为其他都市圈创新高速铁路供给提供新思路。     

生态涵养区农业经济发展与生态环境保护耦合协调研究——以北京市怀柔区为例

选取2010—2017年北京怀柔区农业经济发展系统与生态环境系统若干指标,对数据指标进行标准化处理,并运用熵值法确定指标权重,分别对农业经济系统与生态环境系统进行评价,在此基础上,分别构建耦合度和耦合协调度模型,分析农业经济系统与生态环境系统的协调程度。结果显示,2010—2017年,农业经济系统与生态环境系统的耦合度介于0.925~0.999之间,差别较小,但耦合协调度由于受政府政策、市场等因素影响,在0.416~0.822之间波动较大。论文根据怀柔区两系统间耦合协调度波动的问题提出注重建立农业经济发展与生态环境建设的长效机制,以促进两系统向优质协调发展状态过渡。