What are the prerequisites for a euro area fiscal capacity?

ABSTRACT

This paper discusses a pathway towards achieving fiscal union in the euro area. It outlines three steps and their prerequisites. In the first step, Banking Union would be completed to increase the financial stability of the euro area. It would render the “no bailout” clause more credible and thereby allow to deal better with insolvent governments. In the second step, more centralised funds would be created in order to provide important public goods and in order to deal with large asymmetric shocks. The third step, which is currently unattainable, consists of a true federalisation of important government functions.     

我国动车组列车供餐方式的思考

根据旅客评价,分析现行动车组供餐存在的主要问题,结合国外铁路列车供餐经验,探讨我国铁路如何推进动车组供餐。     

Economic analysis of paliperidone long-acting injectable for chronic schizophrenia in Portugal

Objective: Patients with chronic schizophrenia suffer a huge burden, as do their families/caregivers. Treating schizophrenia is costly for health systems. The European Medicines Agency has approved paliperidone palmitate (PP-LAI; Xeplion), an atypical antipsychotic depot; however, its pharmacoeconomic profile in Portugal is unknown. A cost-effectiveness analysis was conducted from the viewpoint of the Portuguese National Health Service.

Methods: PP-LAI was compared with long acting injectables risperidone (RIS-LAI) and haloperidol (HAL-LAI) and oral drugs (olanzapine; oral-OLZ) adapting a 1-year decision tree to Portugal, guided by local experts. Clinical information and costs were obtained from literature sources and published lists. Outcomes included relapses (both requiring and not requiring hospitalization) and quality-adjusted life-years (QALYs). Costs were expressed in 2014 euros. Economic outcomes were incremental cost-effectiveness ratios (ICERs); including cost-utility (outcome?=?QALYs) and cost-effectiveness analyses (outcomes?=?relapse/hospitalization/emergency room (ER) visit avoided).

Results: The base-case cost of oral-OLZ was 4447€ (20% drugs/20% medical/60% hospital); HAL-LAI cost 4474€ (13% drugs/13% medical/74% hospital); PP-LAI cost 5326€ (49% drugs/12% medical/39% hospital); RIS-LAI cost 6223€ (44% drugs/12% medical/44% hospital). Respective QALYs/hospitalizations/ER visits were oral-OLZ: 0.761/0.615/0.242; HAL-LAI: 0.758/0.623/0.250; PP-LAI: 0.823/0.288/0.122; RIS-LAI: 0.799/0.394/0.168. HAL-LAI was dominated by oral-OLZ and RIS-LAI by PP-LAI for all outcomes. The ICER of PP-LAI over oral-OLZ was 14,247€/QALY, well below NICE/Portuguese thresholds (≈24,800€/30,000€/QALY). ICERs were 1973€/relapse avoided and 2697€/hospitalization avoided. Analyses were robust against most variations in input values, as PP-LAI was cost-effective over oral-OLZ in >99% of 10,000 simulations.

Conclusion: In Portugal, PP-LAI dominated HAL-LAI and RIS-LAI and was cost-effective over oral-OLZ with respect to QALYs gained, relapses avoided, and hospitalizations avoided.     

Institutional arrangements and public debt threshold limits

Inter-governmental Organisations, such as the IMF and OECD, advocate a medium-term reduction in deficit spending and public debt accumulation among advanced economies to satisfy conditions of fiscal sustainability. Buttressing the need for fiscal austerity, Reinhart and Rogoff claim to have identified a so-called tipping point, beyond which public debt accumulation negatively affects economic growth. While recent data seem to indicate that some Eurozone (non-sovereign) economies have reached a tipping point, for other advanced (sovereign) economies, such as the US, UK and Japan, this is not clear. The mainstream tipping point literature however does not recognise the importance of institutional arrangements for the conduct of fiscal and monetary policy. Furthermore, the literature sheds little light on the transmission mechanism between high public debt and low economic growth. This article draws on the principles of Modern Monetary Theory to discuss institutional arrangements and to justify the theoretical and empirical focus on Eurozone economies. The empirical analysis unpacks the transmission mechanism(s) to reveal that Eurozone economies have reached a public debt threshold limit with respect to long-term interest rates.     

A Diagnostic on the West African Monetary Union

Deploying the classical optimum currency areas (OCA) theory and recent developments in the monetary literature, this paper evaluates the appropriateness of West African Monetary Union (WAEMU) as a monetary zone. Nine macroeconomic dimensions are investigated under which the first four items are quantified against a reference economy, namely the United States, the eurozone or China, while the rest are measured in absolute terms for time periods before and after the 2008‐2009 global financial crisis. Results could signify relative dominance of the three world's largest economies to the West African region. In addition to inherent asymmetries across the union, findings suggest the emerging Chinese yuan as an alternative to the euro as the monetary anchor.     

The Road Not Taken: A Comparison Between the Hard ECU and the Euro

In the context of the Eurozone crisis this paper re‐examines the Hard ECU using the concepts of the macroeconomic trilemma and the political trilemma. We find that the Hard ECU would have been less economically and politically damaging than the euro. We conclude that it was a superior approach to monetary union.     

关于铁路动车冠名权的经济学思考

冠名权是一种重要的市场营销和产业创效手段。分析了目前社会上关于铁路动车冠名权争议的内在原因，认为铁路动车冠名权是企业可以自由裁量处置的法人财产权利，是中国铁路总公司无形资产使用权、处置权、收益权的市场化过程，冠名权要与企业品牌和企业形象相得益彰。中国铁路总公司未来需要构建统一的包括冠名权在内的资产经营开发平台。以发展规划和年度计划为牵引，以效率效益监管和资产资源价值管理为抓手，发挥市场价值和价格发现功能，充分挖掘资本溢价和经营收益的潜力，为我国铁路产业建设运营健康持续发展提供支撑。     

HETEROGENEITY IN A CURRENCY UNION WITH SOCIAL MARKET OBJECTIVES

In this paper, we explore whether heterogeneity among union members could threaten the stability of the European Monetary Union. The types of heterogeneity we consider are (1) asymmetries in the transmission of monetary and fiscal policies, and (2) differences in national preferences for price stability, output growth, and income redistribution. Our results show that the costs of membership can be significant for countries whose transmissions, structure, or preferences deviate from those underlying the common monetary policy. In part, these costs arise because monetary policy imposed by an independent central bank automatically constrains the use of fiscal policy by national governments.     

Fiscal restrictions and monetary union: Rationales,repercussions, reforms

We offer a critique of the fiscal preconditions for participation in Stage III of EMU and the Excessive Deficit Procedure of the Maastricht Treaty. We show that the high output costs associated with meeting the fiscal preconditions in Stage II and the incompatibility of the reference values for fiscal policy with other convergence criteria make it unlikely that a mechanical interpretation of those conditions will govern admission to Stage III. Knowledge of this fact will deter governments from undertaking major fiscal adjustments in the first place. Hence, the fiscal criteria of the treaty will not function as an efficient filter for distinguishing countries that are and are not prepared to live with the fiscal consequences of EMU.In Stage III, the function of the Excessive Deficit Procedure is to buttress the European Central Bank's protection from demands for a central bank bailout in the event of a debt crisis in a participating state. We show that other aspects of EU fiscal structure, namely the retention by member states of the bulk of their own revenue-raising capacity, should suffice to restrain the demand for a central bank bailout and the pressure on the ECB to supply it. Until political union follows monetary union, leading to the centralization of fiscal functions and revenu-raising capacity in the EU itself, the Excessive Deficit Procedure will be redundant. If there remains any reason to doubt the credibility of the no-bailout rule, then the best way to buttress it is directly, by further insulating the ECB from pressure to extend a bailout.If it is felt that policy in EU member states is biased toward excessive deficits, then the appropriate place to address this problem is at the national level. A limited approach would involve steps to insure that negotiations over the budget occur in the context of a firm general constraint on the overall level of spending. A more far-reaching reform would involve the creation of National Debt Boards to offset the prevailing bias.     

Monetary and Fiscal Policy Design in the EMU: An Overview

The interaction of monetary and fiscal policies is a crucial issue in a highly integrated economic area such as the European Union. This paper analyzes the design of monetary and fiscal policies in the EMU. To do so, the paper starts with an overview of the most important aspects. Next, it analyzes monetary and fiscal policy interaction in a stylized model of a monetary union, in which monetary and fiscal policy design is modeled as a dynamic stabilization game. Macroeconomic policy making and adjustment are studied under alternative forms of cooperation and in both symmetric and asymmetric settings.