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Chapter 1: The European Economy: Macroeconomic Outlook and Policy

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  • Lars Calmfors
  • Giancarlo Corsetti
  • Michael P. Devereux
  • Seppo Honkapohja
  • Gilles Saint-Paul
  • Hans-Werner Sinn
  • Jan-Egbert Sturm
  • Xavier Vives

Abstract

This chapter provides a macroeconomic outlook and discusses fiscal and monetary policy options for the euro area. The forecast is one of a mild slowdown in the world economy and a slower – but continued – recovery in the European economy. The need for further fiscal consolidation in the EU countries and for a restructuring of government expenditures in favour of government investment, R&D and education is stressed. A special section analyses how well the common monetary policy has fitted individual countries. The upshot is that there are considerable stabilisation policy costs which have not fallen over time. •

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Bibliographic Info

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

Volume (Year): (2007)
Issue (Month): (02)
Pages: 15-58

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Handle: RePEc:ces:eeagre:v::y:2007:i::p:15-58

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