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Quantifying the potential macroeconomic effects of the Europe 2020 strategy: stylised scenarios

Author

Listed:
  • Alexandr Hobza
  • Gilles Mourre

Abstract

Summary for non-specialistsAn essential part of the Europe 2020 strategy consists of reforms with a medium- to long-term horizon that focus on promoting the sustainability of public finances and enhancing potential growth. Building on structural reform simulations with the DSGE model QUEST III, this paper presents several stylised scenarios combining fiscal consolidation efforts with differentiated progress in implementing structural reforms to explore the possible extent of gains from such reforms. The results confirm that if the EU succeeds in generating necessary reform momentum, GDP could increase by up to 7% by 2020. The extent of the benefits will crucially depend on the depth and breadth of undertaken reforms, however..

Suggested Citation

  • Alexandr Hobza & Gilles Mourre, 2010. "Quantifying the potential macroeconomic effects of the Europe 2020 strategy: stylised scenarios," European Economy - Economic Papers 2008 - 2015 424, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
  • Handle: RePEc:euf:ecopap:0424
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    References listed on IDEAS

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    5. Luc Everaert & Werner Schule, 2006. "Structural Reforms in the Euro Area; Economic Impact and Role of Synchronization Across Markets and Countries," IMF Working Papers 06/137, International Monetary Fund.
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    Citations

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    Cited by:

    1. Cacciatore, Matteo & Duval, Romain & Fiori, Giuseppe & Ghironi, Fabio, 2016. "Short-term pain for long-term gain: Market deregulation and monetary policy in small open economies," Journal of International Money and Finance, Elsevier, vol. 68(C), pages 358-385.
    2. repec:exl:29stat:v:17:y:2016:i:3:p:497-514 is not listed on IDEAS
    3. Fabio Di Dio & Barbara Annicchiarico & Francesco Felici, 2011. "The macroeconomics of Europe 2020 reform strategy and the potential effects on Italian economy," EcoMod2011 2866, EcoMod.
    4. repec:eso:journl:v:47:y:2016:i:1:p:1-31 is not listed on IDEAS
    5. Lusine Lusinyan & Dirk V Muir, 2013. "Assessing the Macroeconomic Impact of Structural Reforms The Case of Italy," IMF Working Papers 13/22, International Monetary Fund.
    6. Fritz Breuss, 2013. "Europe as a Global Player," WIFO Working Papers 455, WIFO.
    7. Adam P. Balcerzak & Michał Bernard Pietrzak, 2016. "Quality Of Institutions And Total Factor Productivity In The European Union," Statistics in Transition. New Series, Polish Statistical Association, vol. 17(3), pages 497-514, September.
    8. repec:ers:ijebaa:v:iv:y:2016:i:2:p:19-35 is not listed on IDEAS
    9. Fritz Breuss, 2012. "Towards a New EMU," WIFO Working Papers 447, WIFO.
    10. Daragh Clancy & Rossana Merola, 2016. "ÉIRE Mod: A DSGE Model for Ireland," The Economic and Social Review, Economic and Social Studies, vol. 47(1), pages 1-31.
    11. Annicchiarico, Barbara & Di Dio, Fabio & Felici, Francesco, 2013. "Structural reforms and the potential effects on the Italian economy," Journal of Policy Modeling, Elsevier, vol. 35(1), pages 88-109.
    12. Martina Basarac Sertic & Anita Ceh Casni & Valentina Vuckovic, 2015. "Impact of labour market reforms on economic activity in European Union: short term costs and long term benefits," Financial Theory and Practice, Institute of Public Finance, vol. 39(1), pages 83-107.

    More about this item

    Keywords

    Hobza Mourre structural reform Europe 2020 2020 QUEST III growth employment;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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