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Rebuilding Europe's Common Future: Combining Growth and Reform in the Euro Area

Author

Listed:
  • Adam S. Posen

    (Peterson Institute for International Economics)

  • Ajai Chopra

    (Peterson Institute for International Economics)

  • Angel Ubide

    (Peterson Institute for International Economics)

  • Paolo Mauro

    (Peterson Institute for International Economics)

  • Jacob Funk Kirkegaard

    (Peterson Institute for International Economics)

  • Nicolas Veron

    (Peterson Institute for International Economics)

Abstract

Europe must adopt policies to grow and reform at the same time to reverse its downward economic slide, excessively low inflation, high unemployment, and the risk of a lost decade or more. Seven years after the start of the global financial crisis in 2007, the prospect of secular stagnation threatens to fracture the political and social fabric of the euro area. This PIIE Briefing of six essays by economists at the Peterson Institute for International Economics offers a roadmap for policymakers to guide Europe out of its current self-defeated policy mix. The main message of this volume is that monetary and fiscal policies must more actively work in tandem with productivity-enhancing structural reforms (such as deregulation and deepening the single market) to shift the euro area toward a path of higher growth and stable prices. The policies recommended here are well short of revolutionary, but they would replace the politically accepted but dangerous narrative of fiscal austerity, internal devaluation, and moral hazard, which has led to the current economic malaise.

Suggested Citation

  • Adam S. Posen & Ajai Chopra & Angel Ubide & Paolo Mauro & Jacob Funk Kirkegaard & Nicolas Veron, . "Rebuilding Europe's Common Future: Combining Growth and Reform in the Euro Area," PIIE Briefings, Peterson Institute for International Economics, number PIIEB14-5, October.
    • Handle: RePEc:iie:piiebs:piieb14-5
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    File URL: https://www.piie.com/publications/piie-briefings/rebuilding-europes-common-future-combining-growth-and-reform-euro-area
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    References listed on IDEAS

    as
    1. Olivier J. Blanchard & Lawrence H. Summers, 1986. "Hysteresis and the European Unemployment Problem," NBER Chapters, in: NBER Macroeconomics Annual 1986, Volume 1, pages 15-90, National Bureau of Economic Research, Inc.
    2. Dolls, Mathias & Fuest, Clemens & Neumann, Dirk & Peichl, Andreas, 2014. "An Unemployment Insurance Scheme for the Euro Area," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100572, Verein für Socialpolitik / German Economic Association.
    3. Grégory Claeys & Zsolt Darvas & Guntram B. Wolff, 2014. "Benefits and drawbacks of European Unemployment Insurance," Policy Briefs 847, Bruegel.
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    Cited by:

    1. Angel Ubide, 2015. "Stability Bonds for the Euro Area," Policy Briefs PB15-19, Peterson Institute for International Economics.
    2. Kleczka, Mitja, 2015. "Monetary Policy, Fiscal Policy, and Secular Stagnation at the Zero Lower Bound. A View on the Eurozone," MPRA Paper 67228, University Library of Munich, Germany.
    3. Jorg Bibow, 2015. "The Euro's Savior? Assessing the ECB's Crisis Management Performance and Potential for Crisis Resolution," Economics Working Paper Archive wp_845, Levy Economics Institute.

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