Documents stabilization 39 results

"That the global economy has been hugely successful over the past 50 years is unquestionable. A major underpinning of that success has been the open multilateral system, which has enabled the emergence of a truly international financial system, reciprocal reduction of trade barriers, and the emergence of many previously poor countries into the status of ‘emerging markets' or even ‘developed'. The open multilateral system, however, is increasingly under-appreciated and taken for granted. Preferential trading arrangements have proliferated, and with them the possibility of discriminatory arrangements for capital flows. The absence of an international regime for capital flows permits this development and poses a threat to the system, as do all of the issues on which countries' governments assert ‘their' interests, and ignore their interests in the overall health of the system. It is to be hoped that the benefits of multilateralism are more greatly appreciated, and that the current trend toward increasing regionalism and departures from the post-war system is reversed."

"The macroeconomic literature on automatic stabilization tends to focus on taxes and dismiss the relevance of government expenditure except for unemployment compensation. Our results go sharply contrary to this view. We engage in an empirical analysis of 21 OECD countries from 1982 to 2003 and find that age- and health-related social expenditure as well as incapacity and sick benefits all react to the cycle in a stabilizing manner. While possibly new in the macro literature, this conforms to many results in studies in labour economics. The policy implications are broad since much previous analysis of discretionary fiscal policy rests on official figures for automatic stabilization. There are also major implications for efforts to incorporate automatic fiscal policy in simulation models."

"Our study seeks to put the assumptions of German Stability Culture to the test. The concept is a core legitimizing element of economic policy discourse in Germany and used regularly to juxtapose Germany and northern Europe and the euro area periphery. Using Eurobarometer surveys we construct a measurement for Stability Culture which is based on the priority assigned to the fight against inflation. Our empirical analysis covers the 2002–2010 timespan and includes 27 European Union Member States. Our results show that the distinction between northern states with an allegedly strong and southern states with an allegedly weak Stability Culture is a myth. Controlling for actual inflation, we find that the northern Member States with an allegedly high Stability Culture are less concerned with price stability than the rest of the EU."

"When restarting work on reforming the European Stability Mechanism (ESM), the Eurogroup should heed the lessons of the pandemic: The ESM has become politically unviable while there is apparently a lot more flexibility within the EU treaties than previously thought. Therefore, this policy brief argues that the old reform plans should be put to one side and the ESM should be reinvented inside the EU legal order if it is to remain relevant. Such a reinvention would create a coherent crisis management framework that would be politically sustainable in the long run."

"The transition to a low‐carbon economy will entail a large‐scale structural change. Some industries will have to expand their relative economic weight, while other industries, especially those directly linked to fossil fuel production and consumption, will have to decline. Such a systemic shift may have major repercussions on the stability of financial systems, via abrupt asset revaluations, defaults on debt, and the creation of bubbles in rising industries. Studies on previous industrial transitions have shed light on the financial transition risks originating from rapidly rising “sunrise” industries. In contrast, a similar conceptual understanding of risks from declining “sunset” industries is currently lacking. We substantiate this claim with a critical review of the conceptual and historical literature, which also shows that most literature either examines structural change in the real economy, or risks to financial stability, but rarely both together. We contribute to filling this research gap by developing a consistent theoretical framework of the drivers, transmission channels, and impacts of the phase‐out of carbon‐intensive industries on the financial system and on the feedback from the financial system into the rest of the economy. We also review the state of play of policy aiming to protect the financial system from transition risks and spell out research implications."

"Die europäischen Sozialstaaten sind im Zuge der Krise massiv unter Beschuss geraten. Die neoliberal geprägten politischen Schlussfolgerungen aus der Krise verlangten den Rückbau des Staates und der sozialen Sicherheit. Doch die propagierte Austeritätspolitik führte Europa nur noch tiefer in die Krise. Hinzu kommt, dass wirtschaftswissenschaftliche Erkenntnisse, die der Politik als Legitimationsgrundlage dienten, revidiert wurden und auch internationale Empfehlungen vermehrt eine Trendumkehr einfordern. Tatsächlich ist ein gut ausgebauter Sozialstaat ein Garant für wirtschaftliche Stabilität. Automatische Stabilisatoren und diskretionäre konjunkturbelebende Maßnahmen waren mit ein Grund, warum Österreich die Krise anfänglich besser abfedern konnte als andere. Ohne eine EU-weite Abkehr vom strikten Sparkurs werden positive Wachstumsprognosen noch lange auf sich warten lassen."

"The share of public debt that is held by lenders with preferred creditor status (i.e. the IMF, ECB, ESM, etc.) has increased substantially during Europe's sovereign debt crisis. Empirically, we document in both macro and survey data that there exists a close relationship between the increase in senior tranche lending and the interest rates of countries in crisis. With regard to policy implications, we point out a predicament that policymakers are facing: while aiming to stabilize interest rates at a reasonable level, providing further senior loans might achieve just the opposite, as private markets are gradually pushed into a junior position."

"This article provides an account of the European Union/International Monetary Fund (EU/IMF) financial stabilisation package in Latvia, drawing out its implications for learning-based models of governance and for the relationship between social policy and financial aid. It is argued that the country-specific social and economic context of financial assistance programmes critically influences governments' policy choices and hence the nature of the adjustment process. A case study of the Latvian assistance programme also reveals the role of social policy in the financial aid process, in particular in ameliorating some of the effects of structural adjustment packages. This study also considers shifts in the attitudes of the World Bank and IMF to social policy issues and the changing relationship between social policy and fiscal and macroeconomic policy in the EU. "