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

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  • 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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    Cited by:

    1. Ms. Lusine Lusinyan & Mr. Dirk V Muir, 2013. "Assessing the Macroeconomic Impact of Structural Reforms The Case of Italy," IMF Working Papers 2013/022, International Monetary Fund.
    2. Michał Bernard Pietrzak & Adam P. Balcerzak, 2016. "Quality of Institutions and Total Factor Productivity in the European Union," Statistics in Transition new series, Główny Urząd Statystyczny (Polska), vol. 17(3), pages 497-514, September.
    3. 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.
    4. Magdalena Radulescu & Aleksandra Fedajev & Crenguta Ileana Sinisi & Constanta Popescu & Silvia Elena Iacob, 2018. "Europe 2020 Implementation as Driver of Economic Performance and Competitiveness. Panel Analysis of CEE Countries," Sustainability, MDPI, vol. 10(2), pages 1-20, February.
    5. Barbara Annicchiarico & Fabio Di Dio & Francesco Felici, "undated". "The Macroeconomics of Europe 2020 Reform Strategy and the Potential Effects on the Italian Economy," Working Papers 8, Department of the Treasury, Ministry of the Economy and of Finance.
    6. 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.
    7. Michele Catalano & Emilia Pezzolla, 2015. "The interaction between the labour tax wedge and structural reforms in Italy," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(5), pages 185-223.
    8. Małgorzata K. Guzowska & Barbara Kryk & Dorota Michalak & Paulina Szyja, 2021. "R&D Spending in the Energy Sector and Achieving the Goal of Climate Neutrality," Energies, MDPI, vol. 14(23), pages 1-25, November.
    9. Miss Anna R Bordon & Mr. Christian H Ebeke & Ms. Kazuko Shirono, 2016. "When Do Structural Reforms Work? On the Role of the Business Cycle and Macroeconomic Policies," IMF Working Papers 2016/062, International Monetary Fund.
    10. Fritz Breuss, 2013. "Europa als Global Player," WIFO Working Papers 455, WIFO.
    11. FRANCESCO FELICI & Barbara Annicchiarico & Fabio Di Dio, 2012. "Structural Reforms and the Potential Effects on the Italian Economy," EcoMod2012 5073, EcoMod.
    12. Balcerzak Adam P. & Pietrzak Michał Bernard, 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.
    13. Theodore Katsanevas, 2016. "The debt trap of the Greek economy and the way out," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 19-35.
    14. Fritz Breuss, 2012. "Towards a New EMU," WIFO Working Papers 447, WIFO.
    15. 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.
    16. International Monetary Fund, 2015. "Euro Area Policies: Selected Issues," IMF Staff Country Reports 2015/205, International Monetary Fund.
    17. M. Isabel Landaluce-Calvo & Mariola Gozalo-Delgado, 2021. "Proposal for a Dynamic Composite Indicator: Application in a Comparative Analysis of Trends in the EU Member States Towards the Europe 2020 Strategy," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 154(3), pages 1031-1053, April.
    18. Barbara Kryk & Małgorzata Klaudia Guzowska, 2021. "Implementation of Climate/Energy Targets of the Europe 2020 Strategy by the EU Member States," Energies, MDPI, vol. 14(9), pages 1-18, May.
    19. 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.
    20. International Monetary Fund, 2012. "Republic of Belarus: Selected Issues," IMF Staff Country Reports 2012/114, International Monetary Fund.

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    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; Modern Monetary Theory
    • 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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