The European Commission’s Scoreboard of Macroeconomic Imbalances – The Impact of Preferences on an Early Warning System
AbstractThe European Commission’s Scoreboard of Macroeconomic Imbalances is a rare case of a publicly released early warning system (EWS). That allows for analyzing the preferences of the involved politicians with regard to the two potential errors of an EWS – missing a crisis and issuing a false alarm. This is done for the first time for EWS in general by using a standard signals approach including a preference-based optimization approach to set thresholds. It is shown that in general, the thresholds of the scoreboard are set low (resulting in more alarm signals) as compared to a neutral stand.
Download InfoIf 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.
Bibliographic InfoPaper provided by Halle Institute for Economic Research in its series IWH Discussion Papers with number 10.
Date of creation: Nov 2012
Date of revision:
early warning system; scoreboard; preferences; incentives; political economy;
Find related papers by JEL classification:
- G01 - Financial Economics - - General - - - Financial Crises
- F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
- F53 - International Economics - - International Relations and International Political Economy - - - International Agreements and Observance; International Organizations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-12-06 (All new papers)
- NEP-EEC-2012-12-06 (European Economics)
- NEP-POL-2012-12-06 (Positive Political Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alessi, Lucia & Detken, Carsten, 2011. "Quasi real time early warning indicators for costly asset price boom/bust cycles: A role for global liquidity," European Journal of Political Economy, Elsevier, vol. 27(3), pages 520-533, September.
- Hali J. Edison, 2000.
"Do indicators of financial crises work? an evaluation of an early warning system,"
International Finance Discussion Papers
675, Board of Governors of the Federal Reserve System (U.S.).
- Hali J. Edison, 2003. "Do indicators of financial crises work? An evaluation of an early warning system," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 8(1), pages 11-53.
- Tobias Knedlik & Gregor Von Schweinitz, 2012.
"Macroeconomic Imbalances as Indicators for Debt Crises in Europe,"
Journal of Common Market Studies,
Wiley Blackwell, vol. 50(5), pages 726-745, 09.
- Tobias Knedlik & Gregor von Schweinitz, 2011. "Macroeconomic Imbalances as Indicators for Debt Crises in Europe," IWH Discussion Papers 12, Halle Institute for Economic Research.
- Laffont, Jean-Jacques, 2000.
"Incentives and Political Economy,"
Oxford University Press, number 9780198294245.
- Graciela L. Kaminsky & Carmen M. Reinhart, 1996.
"The twin crises: the causes of banking and balance-of-payments problems,"
International Finance Discussion Papers
544, Board of Governors of the Federal Reserve System (U.S.).
- Carmen M. Reinhart & Graciela L. Kaminsky, 1999. "The Twin Crises: The Causes of Banking and Balance-of-Payments Problems," American Economic Review, American Economic Association, vol. 89(3), pages 473-500, June.
- Reinhart, Carmen & Kaminsky, Graciela, 1999. "The twin crises: The causes of banking and balance of payments problems," MPRA Paper 14081, University Library of Munich, Germany.
- Bussiere, Matthieu & Fratzscher, Marcel, 2008. "Low probability, high impact: Policy making and extreme events," Journal of Policy Modeling, Elsevier, vol. 30(1), pages 111-121.
- Makram El-Shagi & Tobias Knedlik & Gregor von Schweinitz, 2012.
"Predicting Financial Crises: The (Statistical) Significance of the Signals Approach,"
IWH Discussion Papers
3, Halle Institute for Economic Research.
- El-Shagi, M. & Knedlik, T. & von Schweinitz, G., 2013. "Predicting financial crises: The (statistical) significance of the signals approach," Journal of International Money and Finance, Elsevier, vol. 35(C), pages 76-103.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Hubert Gabrisch).
If references are entirely missing, you can add them using this form.