Advanced Search
MyIDEAS: Login to save this article or follow this journal

Fiscal and Monetary Policy

Contents:

Author Info

  • Giancarlo Corsetti
  • John Flemming
  • Seppo Honkapohja
  • Willi Leibfritz
  • Gilles Saint-Paul
  • Hans-Werner Sinn
  • Xavier Vives

Abstract

This chapter considers the monetary and fiscal policies appropriate to Europe under the circumstances of an adverse international cycle and a weak euro. Typically, governments have medium-term plans for fiscal consolidation, “stabilisation plans”, calling for a falling trend in budget deficits. The European Commission has called for this trend to be sustained and argued that the ECB should provide the necessary value-stimulus by cutting interest rates further. On the other hand Euro area interest rates are already lower than would be expected on the basis of the evolution of prices and output, and an indicator based on interest and exchange rates also indicates considerable easing of monetary conditions throughout 2001. It would be appropriate for deficits to rise throughout Europe during the current cyclical downturn, except where stabilisation efforts have been weakest, and debt income ratios are also highest, and even there they should not decline. We also believe that (especially as compared to the US Fed) the ECB has room to cut interest rates further – a measure which should be adopted sooner rather than later. It may also be appropriate to consider a contingency plan for a more radical and co-ordinated policy throughout Europe.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/ZS/ZS-EEAG_Report/zs-eeag-2002/FORUMSPECIAL_CHAP3_2002.pdf
Download Restriction: no

Bibliographic Info

Article provided by CESifo Group Munich in its journal EEAG Report on the European Economy.

Volume (Year): (2002)
Issue (Month): (04)
Pages: 42-47

as in new window
Handle: RePEc:ces:eeagre:v::y:2002:i::p:42-47

Contact details of provider:
Postal: Poschingerstrasse 5, 81679 Munich, Germany
Phone: +49 (89) 9224-0
Fax: +49 (89) 985369
Email:
Web page: http://www.cesifo-group.de
More information through EDIRC

Related research

Keywords:

Other versions of this item:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Preston, Bruce, 2006. "Adaptive learning, forecast-based instrument rules and monetary policy," Journal of Monetary Economics, Elsevier, vol. 53(3), pages 507-535, April.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ces:eeagre:v::y:2002:i::p:42-47. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.