The basic idea is that observable forecasts of macroeconomic variables are transformations of the sets of macroeconomic information, which are so complex as to be unobservable, prevailing when the forecasts are made.
The European Union should take significant economic measures in response to the war in Ukraine, but a new Next Generation EU is not needed yet.
Article published in the Journal of Economic Policy Reform.
Beijing will support Moscow as long as it does not fall foul of Western sanctions.
The EU’s ambitious emissions reduction targets will require a major increase in green investments. This column considers options for increasing public green investment when major consolidations are needed after the fiscal support provided during the pandemic. The authors make the case for a green golden rule allowing green investment to be funded by deficits that would not count in the fiscal rules. Concerns about ‘greenwashing’ could be addressed through a narrow definition of green investments and strong institutional scrutiny, while countries with debt sustainability concerns could initially rely only on NGEU for their green investment.
Adjustments to growth forecasts mean some countries will get 10% more than expected and others 20% less in grants from the EU Recovery and Resilience Facility. But the benefits of more quickly rising growth rates dwarf foregone recovery funds.
Discussions on the fiscal framework should aim to correct its procyclical nature with a view to promoting more cooperative outcomes.
Testimony given to a Tweede Kamer der Staten-Generaal roundtable discussion on the future of the stability and growth pact.
By and large, setting a new green golden rule would be a useful addition to the existing EU fiscal framework.
Increasing green public investment while consolidating deficits will be a central challenge of this decade. A green fiscal pact would address this tension, but difficult trade-offs remain.
With Fit for 55, Europe is the global first mover in turning a long-term net-zero goal into real-world policies, marking the entry of climate policy into the daily life of all citizens and businesses.
The EU will become into a major issuer of safe assets in the coming years. How will this interact with the debt issuance of European sovereign debts?