Vogel, L. (2014) “Structural reforms at the zero bound“, European Economy – Economic Papers. Νο. 537, European Commission Publications, November 2014: Brussels.
This paper uses the European Commission’s QUEST macroeconomic model to analyse the impact of structural reforms on economic activity in an environment in which the zero bound on monetary policy rates is temporarily binding. The simulations suggest that although such reforms can have a negative impact on economic activity in the short run, these effects tend to be small and short-lived when a variety of transmission channels are considered. The results also do not support the idea that postponing structural reforms improves economic conditions, in such and environment.
Relevant posts:
- Theodoropoulou, S. (2014) “Structural Reforms Will Not Mitigate The Risk Of Deflation In Europe“, Social Europe Journal, 10 November.
- De Grauwe, P. (2014) “Stop Structural Reforms and Start Public Investment in Europe“, Social Europe Journal, 17 September.
- Rubio, E. (2013) “Which financial instrument to facilitate structural reforms in the euro area?“, Notre Europe – Jacques Delors Institute, Policy Paper No.104, December.