Contracting out: The Importance of a Solution for the VAT Distortion

In member states of the European Union, the current VAT treatmentof activities of public authorities creates significant distortionsin their decision-making between public provision and contractingout of public services. In several EU-member states, a refundof VAT to local governments eliminates this effect. Therefore,these VAT refund schemes facilitate contracting out. In memberstates with a refund scheme for the VAT costs of local governmentsor another solution to this distortion, in general refuse collectionis contracted out to a relatively greater extent compared tomember states without. Despite these solutions, the VAT distortionis still relevant for private suppliers of tax-exempt activitiesand public suppliers in other member-states. This distortioncould be addressed by a change in the European VAT legislation.(JEL H25; H32)     

The effects of public deficits on money growth in the European Union

The impact of government debt on the money supply has been studied for different countries, with an emphasis on developing countries and the U.S. This topic becomes especially interesting in European Union countries that have high public deficits and low inflation rates. It is also very relevant in the monetary union, with a European central bank controlling monetary policy and introducing monetary measures for all the member countries. The main goal of this paper is to analyze if there is any relationship between public deficits and monetary growth in the European Union. The conclusions presented in the previous literature are ambiguous. Some studies concluded that there is little evidence that government debt influences money in some of the member countries.     

PUBLIC ENTERPRISE IN THE EUROPEAN UNION: prospects and constraints

ABSTRACT * : The author highlights the problems and prospects of public enterprises within the European Union, as well as the major adjustments considered necessary for these enterprises to fulfil their role. He argues that general criteria determining whether the production of goods and services should be in the public sector cannot be readily established in the European Union, since public supply does not solely depend on the specific economic characteristics of the particular good or service, but also on the prevailing social, cultural and economic conditions in each country, on the economic policy pursued, and on the structural characteristics of its private and public sectors, including entrepreneurial and trade union behaviour.     

Biofuels as Sustainable Technologies: Perspectives for Less Developed Countries

The future outlook of biofuels is beset by uncertainty. Key factors for the adoption of biofuels as alternative technologies are policy decisions by governments in terms of regulations, such as government procurement schemes and fuel specifications, along with financial and economic instruments, such as subsidies and preferential taxation. In this framework, the present analysis is a prospective as to the future development of a biofuel program in the European Union and the hypothetical role of developing countries as suppliers in this new market. The focus of this article is, exclusively, on liquid fuels.     

On the empirical specification of the European demand for money

This paper tests several aspects concerning the specification of an empirical demand for money function for the European Monetary Union. The econometric results show that wealth is a statistically significant determinant for the demand for money. A homogeneous sample period is statistically established, and a demand equation for liquid assets (other than strict money) is presented. A new method to weight and add national variables is also suggested to obtain European aggregates. The main policy implication is that monetary aggregate targeting should not be the main basis for monetary policy implementation.     

The Crisis of America’s Cities

This paper aims to show how state intervention within the European Monetary Union can have positive effects not only on growth but also on public balances and debt. The relation between centralized monetary policy and decentralized fiscal policy partly solves the lack of coordination between the two. Each time a fiscal expansion in an EU country is not accompanied by a Central Bank interest rate increase, the expansionary effect of public spending, initially financed through the emission of public bonds, will be reinforced by endogenous money creation due to the increase in growth. The final result, if growth exceeds the rate of interest, is not only an increase in equilibrium income, but also a reduction in debt.     

Public transaction costs of agri-environmental schemes and their determinants—Analysing stakeholders' involvement and perceptions

Despite an overall budget increase for rural development in the new programming period (2007-2013), most older Member States in the now expanded European Union are facing a substantial reduction in their budget for rural development and thus for agri-environmental schemes (AESs). It can be assumed that, in most countries, none or at best only part of this loss can be offset by national funds. Therefore the design of more efficient national governance structures for AESs, which decrease public transaction costs (TCs), would be an appropriate solution to this problem. The objective of this paper is to define the factors that influence these public TCs, so that appropriate action can then be taken to reduce them. A statistical analysis, with a proxy for public TCs, is combined with an analysis of stakeholder perceptions (excluding farmers) concerning public TC influencing factors. The research showed that it is mainly scheme related factors that are perceived to be important, although the governance structure, institutional environment and level of trust also play a role. Finally, the analysis of perceptions concerning TCs also showed that AES related actors have a limited knowledge of TCs.     

面对中国市场经济地位问题：美国和欧盟的政策比较及启示

在今年若干国家正式承认了中国的市场经济地位的国际背景下,美国和欧盟却宣称暂时不给予中国市场经济地位。美国和欧盟作为中国的两大贸易伙伴,这样的外交辞令无疑会对其他与中国有贸易往来的国家产生导向作用,而这与中国目前积极争取获得市场经济地位的近期目标是相左的。针对美国和欧盟对中国市场经济地位的政策比较,进而分析两者的异同,谋求各个击破的方法并提出相应的政策建议,最终为中国争取全面获得市场经济地位做出努力。     

A simple inflation indicator for the euro zone

This article proposes and estimates an inflation indicator for the European Monetary Union (EMU). This indicator is set up so that it is contemporarily not affected by the changes in price differentials among EMU countries. The results show that the Monetary Union Index of Consumer Prices (MUICP), which is the inflation measure that the European Central Bank (ECB) takes as a reference for monetary policy purposes, could be understating the value of the inflation in the euro zone. It is also concluded that regional peculiarities are fundamental in the evolution of prices in the different EMU countries.     

Public service and competition in the European Union

In recent years, the Treaty of the European Union and the European institutions have had a rapidly increasing impact on the reorganization of commercial public services within the Member States. The trend has been dual—toward liberalization and toward harmonization of standards and national legislations. Progress is reported and analyzed in telecommunications, rail services, and electricity. A general concern is to reconcile legitimate public service obligations with the rules of competition that are prominent in the Treaty. New forms of regulation are tested in various countries preparing for the emergence of a European regulation framework.     

Product Quality and the Optimal Structure of Commodity Taxes

The comparison between ad valorem and specific taxation is among the oldest issues in formal public finance and is important for policy in the European Union (EU) and elsewhere. This paper develops and articulates simple but very general elasticity rules that characterize the optimal balance between the two in a model of endogenous product quality. These rules temper the preference for ad valorem taxation that emerges from homogeneous product models, pointing to relatively heavy reliance on whichever form of taxation has the least effect on product quality.     

How many educated workers for your economy? European targets,optimal public spending,and labor market impact

This paper studies optimal taxation schemes for education in a search-matching model where the labor market is divided between a high-skill and a low-skill sector. Two public policy targets - maximizing the total employment level and optimizing the social surplus - are studied according to three different public taxation strategies. We calibrate our model using evidence from thirteen European countries, and compare our results with the target from the Europe 2020 Agenda for achievement in higher education. We show that, with current labor market characteristics, the target set by governments seems compatible with the social surplus maximization objective for some countries, while being too high for other countries. For all countries, maximizing employment would imply higher educational spending than that required for the social surplus to reach its maximum.     

Fiscal space on the eurozone periphery and the use of the (partially) balanced-budget multiplier: The case of Spain

This article adopts the “functional finance” approach to consider the utilization of expansive fiscal policies in the members of the European Monetary Union most affected by high unemployment. As they do not have their own monetary policy, fiscal deficits require the issuing of public debt without the support of the central bank. The authors consequently incorporate the notion of a (partially) balanced-budget expansion to achieve the desired stimulus in gross domestic product (GDP) with the least possible effect on public debt. Their proposal is only a sort of “imperfect” balanced-budget expansion: It is based on the idea that simultaneous increases in public revenue and expenditure can boost GDP, but without any pretension of keeping public deficit unchanged. Specifically, the authors use the case of Spain to show that a more expansive fiscal policy is desirable on economic grounds, and that only institutional constraints prevent it. They do it presenting two alternative scenarios for the coming years and analyzing their different impact on unemployment and fiscal sustainability. The first represents a firm commitment to budget consolidation, whereas the second is based on this “imperfect” application of the balanced budget multiplier. The main conclusion is that a more expansive fiscal policy is perfectly compatible with finance sustainability.     

Budget burden and benefit visibility of European central level governments

Central levels of government in European Union member countries are different regarding their basic institutions, powers, fiscal systems, accountability, public performance management, financial control bodies, and the like. In spite of this, the economic operation of such levels of government should be analyzed, evaluated, and compared from an efficiency viewpoint. This paper presents general indicators to systematically assess the burden and benefit visibility of public budgets of the International Monetary Fund member countries and specific estimates for the central subsystems of public revenue and expenditure now in force in such European countries. An important policy implication of these estimates seems straightforwardly perceived: significant allocation improvements could be obtained by implementing changes and reforms, aiming to raise their current visibility values. An earlier version of this paper was presented at the Forty-Ninth International Atlantic Economic Conference, March 14–21, 2000, Munich, Germany. The author is indebted to conference participants for helpful comments. The author is responsible for any errors or shortcomings.     

The monetary transmission mechanism: evidence and implications for European Monetary Union

We provide some evidence consistent with a heterogeneous credit channel of monetary policy transmission in the European Union. Using the techniques of cointegration and Error Correction Models, we have shown that the external finance premium is one important leading indicator of real economic activity in Germany and Italy. No evidence is found for France and the UK. Therefore, a common monetary policy implemented by the European Central Bank might be transmitted in different ways across the member countries of the monetary union, thus exacerbating existing regional disparities among the member countries.     

EMU, MAASTRICHT, AND THE 1996 INTERGOVERNMENTAL CONFERENCE

This paper presents various economic approaches to achieving monetary union, particularly in the context of European Economic and Monetary Union (EMU) as envisaged in the 1991 Maastricht Treaty. It evaluates the implications of Maastricht, given the economic convergence criteria embodied in the Treaty, in terms of economic policy for individual Member States and for the European Union (EU) as a whole. The paper assesses the EU's options for amending the Maastricht Treaty at its scheduled inter-governmental conference (IGC).     

Conscientious vs. ambivalent consumers: Do concerns about energy availability and climate change influence consumer behaviour?

Energy availability and climate change are interrelated concerns with economic components. They need to be addressed by policy makers and they require changes in energy consumption. This study examines whether concerns about energy availability and climate change influence consumer behaviour, policy perceptions, and beliefs about future energy consumption. This question is investigated by analysing data from the Eurobarometer 75.4, a comprehensive survey of citizens from all countries of the European Union that was conducted in June 2011 (n = 26,840). The regression results show that people concerned about climate change were significantly more likely to take action to mitigate climate change, and to be more favourably disposed towards energy policies and future changes in energy consumption, than people who were not concerned about climate change. On the other hand, people who were concerned about energy availability undertook fewer actions and neither supported energy policies nor believed in future changes in energy consumption. This surprising finding raises questions regarding the adequate communication of energy availability and policies to the public in the European Union.     

The real rate of protection: the income and insurance effects of agricultural policy

Agricultural price policies in developed countries aim at protecting farmers against both low and volatile world market prices. However, traditional indicators of protection only refer to the income (level) effect of policy. Following other research, it is argued that public policy can also yield an insurance (stabilizing) effect. In this paper a way to measure these dual effects is proposed. The method is illustrated with wheat market data for the USA and the European Union. Strong evidence is found that the insurance effect is an important component of protection, albeit a small one relative to the income effect. Policy support provided higher income and lower insurance effects in the EU than in the USA. For both markets, policy reforms in the 1990s led to significantly reduced income effects and smaller insurance effects. Without accounting for the influence of policy on income variability, traditional measures of protection will understate the real rate of protection.     

Demand for cigarettes in Turkey: an application of count data models

Household cigarette demand in Turkey is examined using the zero-inflated negative binomial model to account for a large portion of households not reporting cigarette smoking or purchase and estimated using the data from the national household survey implemented in 2003. Data were divided into two main groups: families with and without teenagers. Results identify relevant household head and household characteristics needed to develop effective public policy to prevent the decision to begin to smoke and to reduce cigarette purchase to lower the future growth of government healthcare expenditures. Specifically, healthcare expenditure share, income, and cigarette-price elasticities are relevant in lowering cigarette purchases. The calculated price elasticities for cigarette demand falls within the range determined by studies conducted for developed countries including the member states of the European Union. An estimate of the effect of an increase in the excise tax lowering demand is provided.     

推进科技创新 促进地区发展——欧盟地区政策简析

经过6次扩大,欧盟目前已经拥有27个成员国,其各个成员国的不同的发展状态和经济发展水平,加剧了整个欧盟层面上区域发展的不平衡状况。为了缩小其成员国以及地区间的经济差距,增强其社会凝聚力,进一步推进经济、政治一体化,欧盟制定并推行了一系列的旨在缩小地区差距以确保各成员国经济社会能够相对均衡、协调发展的地区政策。多年的实践使得欧盟在地区发展领域积累了丰富的经验,也在促进其成员国,特别是经济较为落后的成员国经济和社会发展方面取得了相当的成绩。本文试图对欧盟的地区政策,特别是其通过科技创新为地区发展所作的努力作一剖析,希望读者有所收益。