Structural Reforms in the EU and Political Myopia in Economic Policies
The paper considers economic reforms in the EU using an economic-political model which captures the possible myopia in economic policies, and analyses reforms in taxation, the welfare state, and in the labour and product markets. We show that high taxes and an extensive welfare state are likely to be the case under myopia as compared to the social optimum. We also consider the interaction between the reform activity and the Stability and Growth Pact, which hampers reforms in tax policies, but is conducive to reforming the wel-fare state, the product and labour markets, although the magnitude of these impacts is not marked under the actual tightness of the Pact. We also find that economic and political considerations tend to favour the emphasis to be put on reforming the goods market, instead of the labour market, which has also broadly speaking been the case in reality in the EU. Econometric evidence presented in the paper also supports these results. Coordination of re-forms in the EU is most important in the case of the product market, but not in other fields.
|Date of creation:||2006|
|Date of revision:|
|Contact details of provider:|| Postal: Lönnrotinkatu 4 B, FIN-00120 HELSINKI|
Phone: +358 (0)9 609 900
Fax: +358 (0)9 601 753
Web page: http://www.etla.fi/
More information through EDIRC
|Order Information:|| Email: |
References listed on IDEAS
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.:
- Roel M. W. J. Beetsma & Xavier Debrun, 2004.
"Reconciling Stability and Growth: Smart Pacts and Structural Reforms,"
IMF Staff Papers,
Palgrave Macmillan, vol. 51(3), pages 431-456, November.
- Beetsma, Roel & Debrun, Xavier, 2003. "Reconciling Stability and Growth: Smart Pacts and Structural Reforms," CEPR Discussion Papers 3930, C.E.P.R. Discussion Papers.
- Roel M. W. J. Beetsma & Xavier Debrun, 2003. "Reconciling Stability and Growth; Smart Pacts and Structural Reforms," IMF Working Papers 03/174, International Monetary Fund.
- Peter Hoeller & Claude Giorno, 2006. "Nothing Ventured, Nothing Gained: The Long-Run Fiscal Reward of Structural Reforms," OECD Economics Department Working Papers 493, OECD Publishing.
- Kotilainen, Markku, . "Economic Shocks, Progressiveness of Taxation, and Indexation of Taxes and Public Expenditure in EMU," Discussion Papers 1011, The Research Institute of the Finnish Economy.
- Gilles Saint Paul & Samuel Bentolila, 2000.
"Will EMU increase eurosclerosis?,"
Economics Working Papers
449, Department of Economics and Business, Universitat Pompeu Fabra.
- A. Lans Bovenberg & Johan J. Graafland & Ruud A. de Mooij, 1998.
"Tax Reform and the Dutch Labor Market: An Applied General Equilibrium Approach,"
NBER Working Papers
6693, National Bureau of Economic Research, Inc.
- Bovenberg, A. Lans & Graafland, Johan J. & de Mooij, Ruud A., 2000. "Tax reform and the Dutch labor market: an applied general equilibrium approach," Journal of Public Economics, Elsevier, vol. 78(1-2), pages 193-214, October.
- Bovenberg, A.L. & Graafland, J.J. & de Mooij, R.A., 2000. "Tax reform and the Dutch labour market : An applied general equilibrium approach," Other publications TiSEM a22f887a-ce1a-4aa2-ad01-6, Tilburg University, School of Economics and Management.
- Bovenberg, A Lans & de Mooij, Ruud A & Graafland, Johan J, 1998. "Tax Reform and the Dutch Labour Market: An Applied General Equilibrium Approach," CEPR Discussion Papers 1983, C.E.P.R. Discussion Papers.
- Sibert, Anne, 1999. "Monetary Integration and Economic Reform," Economic Journal, Royal Economic Society, vol. 109(452), pages 78-92, January.
- Sébastien Jean & Giuseppe Nicoletti, 2015.
"Product market regulation and wage premia in Europe and North America: an empirical investigation,"
- Sébastien Jean & Giuseppe Nicoletti, 2015. "Product market regulation and wage premia in Europe and North America: An empirical investigation," International Economics, CEPII research center, issue 144, pages 1-28.
- Sébastien Jean & Giuseppe Nicoletti, 2002. "Product Market Regulation and Wage Premia in Europe and North America: An Empirical Investigation," OECD Economics Department Working Papers 318, OECD Publishing.
- Lars Calmfors & Åsa Johansson, 2002.
"Nominal Wage Flexibility, Wage Indexation and Monetary Union,"
CESifo Working Paper Series
761, CESifo Group Munich.
- Lars Calmfors & Asa Johansson, 2006. "Nominal Wage Flexibility, Wage Indexation and Monetary Union," Economic Journal, Royal Economic Society, vol. 116(508), pages 283-308, 01.
- Calmfors, Lars & Johansson, Åsa, 2002. "Nominal Wage Flexibility, Wage Indexation and Monetary Union," Seminar Papers 716, Stockholm University, Institute for International Economic Studies.
- Heijdra, Ben J., 2009. "Foundations of Modern Macroeconomics," OUP Catalogue, Oxford University Press, edition 2, number 9780199210695, May.
- Sibert, Anne & Sutherland, Alan, 2000. "Monetary union and labor market reform," Journal of International Economics, Elsevier, vol. 51(2), pages 421-435, August.
- Hatzius, Jan, 2000. "Foreign direct investment and factor demand elasticities," European Economic Review, Elsevier, vol. 44(1), pages 117-143, January.
- Blanchard, Olivier J & Giavazzi, Francesco, 2004. "Improving the SGP Through a Proper Accounting of Public Investment," CEPR Discussion Papers 4220, C.E.P.R. Discussion Papers.
- Marco Buti, 2006. "Will the new stability and growth pact succeed? An economic and political perspective," European Economy - Economic Papers 241, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
- Alho, Kari & Erkkilä, Mika & Kotilainen, Markku, . "The Economics and Policies of Integration - a Finnish Perspective," ETLA A, The Research Institute of the Finnish Economy, number 22.
- Alho, Kari, 2002. "The Equilibrium Rate of Unemployment and Policies to Lower It: The Case of Finland," Discussion Papers 839, The Research Institute of the Finnish Economy.
When requesting a correction, please mention this item's handle: RePEc:rif:dpaper:1050. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kaija Hyvönen-Rajecki)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.