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A comparison of structural reform scenarios across the EU member states - Simulation-based analysis using the QUEST model with endogenous growth

  • Francesca D'Auria
  • Andrea Pagano
  • Marco Ratto
  • Janos Varga

This paper calibrates the Roeger-Varga-Veld (2008) micro-founded DSGE model with endogenous growth for all EU member states using country specific structural characteristics and employs the individual country models to analyse the macroeconomic impact of various structural reforms. We analyse the costs and benefits of reforms in terms of fiscal policy instruments such as taxes, benefits, subsidies and administrative costs faced by firms. We find that less R&D intensive countries would benefit the most from R&D promoting and skill-upgrading policies. We also find that shifting from labour to consumption taxes, reducing the benefit replacement rate and relieving administrative entry barriers are the most effective measures in those countries which have high labour taxes and entry barriers.

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Paper provided by Directorate General Economic and Financial Affairs (DG ECFIN), European Commission in its series European Economy - Economic Papers 2008 - 2015 with number 392.

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Length: 50 pages
Date of creation: Dec 2009
Date of revision:
Handle: RePEc:euf:ecopap:0392
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