Carnot, N. & Evans, P. (2015) “Income insurance: a theoretical exercise with empirical application for the euro area“, European Commission, Economic and Financial Affairs, European Economy – Economic Papers 546, Μάρτιος.
This paper examines whether hypothetical macroeconomic insurance schemes of various kinds could improve the degree of cyclical income stabilisation in the euro area. We review the potential issues, the underlying trade-offs and the necessary conditions for such schemes to work efficiently. The paper discusses “good” design features, which raise the potential efficiency and acceptability of these mechanisms. It argues that such schemes would preferably focus on large shocks, moderate the boom times as well as cushion adverse shocks, and include a degree of budgetary prudence to cater for real-time uncertainty in assessing business cycles. It also carries out retrospective empirical simulations using both “ex post” and “real-time” data for the euro area. The results suggest that all the schemes considered would have provided non-negligible income insurance over the past 10-20 years, although somewhat less so when operating on the basis of data available in real time. The insurance schemes reviewed do not require particularly large or persistent payments into or out of them.
Σχετικές αναρτήσεις:
- Dr Richard M. Ebeling (2015) “A World Without The Welfare State“, The Cobden Centre, Politics 29 Μαρτίου.
- Schmid, G. (2014) “Inclusive Growth: What Future for the European Social Model?“, IZA Policy Paper No. 82, Μάιος 2014.
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