Cheng, Gong, Diaz-Cassou, Javier, Erce, Aitor, (2016), “The Macroeconomic Effects of Official Debt Restructuring: Evidence from the Paris Club”, ESM Working Paper 21, 29 December This paper presents new empirical results on the macroeconomic impact of sovereign debt restructurings with official-sector creditors. Using a novel dataset on Paris Club restructurings and Local Projection methods, we find that Paris Club treatments can have a significant impact on economic growth — 2% …Read More

Carone, Giuseppe, Eckefeldt, Per, Giamboni, Luigi, Laine, Veli, Pamies Sumner, Stéphanie, (2016), “Pension Reforms in the EU since the Early 2000’s: Achievements and Challenges Ahead”, European Commission, 23 December Most EU Member States have carried out substantial pension reforms over the last decades in order to enhance fiscal sustainability, while maintaining adequate pension income. The intensity of pension reforms has been particularly strong since 2000. These reforms have been implemented …Read More

Belke, Ansgar, Osowski, Thomas, (2016), “Measuring fiscal spillovers in EMU and beyond: A Global VAR approach”, CEPS, 16 December This paper empirically identifies and measures fiscal spillovers in the EU countries using a global vector autoregression (GVAR) model. Our aim is to look at the sign and the absolute values of fiscal spillovers in a country-wise perspective and at the time profile (impulse response) of the impacts of fiscal shocks. …Read More

Égert, Balázs, Gal, Peter, (2016), “The quantification of structural reforms in OECD countries: a new framework”, OECD Economic Department Working Paper No. 1354, 20 December This document describes and discusses a new supply side framework that quantifies the impact of structural reforms on per capita income in OECD countries. It presents the overall macroeconomic impacts of reforms by aggregating over the effects on physical capital, employment and productivity through a production function. …Read More

Philippon, Thomas, Roldán, Francisco, (2016), “On the Optimal Speed of Sovereign Deleveraging with Precautionary Savings”, International Monetary Fund, November We study the optimal path of reduction of government debt in an economy when the economy is depressed and there is significant sovereign default risk. We emphasize the endogenous response of savers to sovereign risk. We obtain two main results. First, this new macro-economic channel changes the tradeoff between the recessionary …Read More

Mourre, Gilles, Astarita, Caterina, Maftei, Anamaria, (2016), “Measuring the Uncertainty in Predicting Public Revenue”, European Commission, December This paper provides an assessment of the uncertainty surrounding revenue predictions, through an ex post analysis of European Commission’s forecasts over the last 15 years. It estimates the forecast errors affecting revenue for all 28 Member States, using the different vintages of the autumn and spring Commission forecasts. It analyses both the direction and …Read More

Romain Duval, Davide Furceri, (2016), “The Effects of Labor and Product Market Reforms: The Role of Macroeconomic Conditions and Policies”, International Monetary Fund, November The paper estimates the dynamic macroeconomic effects of labor and product market reforms on output, employment and productivity, and explores how these vary with prevailing macreconomic conditions and policies. We apply a local projection method to a new dataset of major country- and country-sector-level reform shocks in …Read More

Corsetti, Giancarlo, Dedola, Luca,  Jarociński, Marek, Maćkowiak, Bartosz, Schmidt, Sebastian, (2016), “Macroeconomic stabilization, monetary-fiscal interactions, and Europe’s monetary union“, European Central Bank,  December The euro area has been experiencing a prolonged period of weak economic activity and very low inflation. This paper reviews models of business cycle stabilization with an eye to formulating lessons for policy in the euro area. According to standard models, after a large recessionary shock accommodative monetary and …Read More

Bertola, Giuseppe, (2016), “European Unemployment Revisited: Shocks, Institutions, Integration”, International Monetary Fund, 26 October This paper painstakingly restores a vintage empirical model of unemployment determination by interacting shocks and institutions, and runs it on recent data featuring dramatic shocks and controversial institutional change. Theoretical insights and empirical results suggest that reforms and capital áows contribute sensible and interrelated explanations for the recent twists and turns of unemployment rates in Europe …Read More

Beck, Roland, Ferrucci, Gianluigi, Hantzsche, Arno, Rau-Goehring, Matthias, (2016), “Determinants of sub-sovereign bond yield spreads: the role of fiscal fundamentals and federal bailout expectations”, European Central Bank, 9 December This paper investigates to what extent yield spreads on bonds issued by sub-sovereign entities within federations are driven by bailout expectations and investors’ risk appetite, as opposed to fundamental values related to default risk. The question is analysed both across and …Read More