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Macroeconomic co-ordination as an economic policy concept - opportunities and obstacles in the EMU

  • Eckhard Hein

    (WSI in der Hans Boeckler Stiftung)

  • Achim Truger

    (WSI in der Hans Boeckler Stiftung)

This paper traces the euro zone’s inadequate macroeconomic performance in recent years back to the predominance of a restrictive macroeconomic policy mix based on a ‘new monetarist’ approach to economic policy. An approach based on a (post-)Keynesian analysis is presented as a growth and employment-oriented alternative to this restrictive policy mix. Contrary to the strict assignment of macroeconomic goals to the macroeconomic policy actors and their instruments in the ‘new monetarist’ approach, the alternative requires the co-ordination of monetary, fiscal and wage policies in order to achieve growth, high employment and price stability. The paper examines the opportunities for and the obstacles to macroeconomic co-ordination given by the institutional framework of the European Monetary Union.

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File URL: http://128.118.178.162/eps/mac/papers/0408/0408011.pdf
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Paper provided by EconWPA in its series Macroeconomics with number 0408011.

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Length: 35 pages
Date of creation: 24 Aug 2004
Date of revision:
Handle: RePEc:wpa:wuwpma:0408011
Note: Type of Document - pdf; pages: 35
Contact details of provider: Web page: http://128.118.178.162

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  1. Truger, Achim & Schulten, Thorsten & Hein, Eckhard, 2004. "Wage trends and deflation risks in Germany and Europe," WSI Discussion Papers 124, Wirtschafts- und Sozialwissenschaftliches Institut (WSI), Hans-Böckler-Stiftung.
  2. Philip Arestis & Kevin McCauley & Malcolm Sawyer, 2000. "An Alternative Stability Pact for the European Union," Macroeconomics 0004043, EconWPA.
  3. Stephen G. Cecchetti, 1999. "Legal Structure, Financial Structure, and the Monetary Policy Transmission Mechanism," NBER Working Papers 7151, National Bureau of Economic Research, Inc.
  4. Hein, Eckhard & Truger, Achim, 2005. "European Monetary Union: nominal convergence, real divergence and slow growth?," Structural Change and Economic Dynamics, Elsevier, vol. 16(1), pages 7-33, March.
  5. Bob HanckÈ & David Soskice, 2003. "Wage-Setting and Inflation Targets in EMU," Oxford Review of Economic Policy, Oxford University Press, vol. 19(1), pages 149-160.
  6. Hein, Eckhard, 2002. "Monetary policy and wage bargaining in the EMU: Restrictive ECB policies, high unemployment, nominal wage restraint and rising inflation," WSI Discussion Papers 103, Wirtschafts- und Sozialwissenschaftliches Institut (WSI), Hans-Böckler-Stiftung.
  7. Philip Arestis & Andrew Brown & Kostas Mouratidis & Malcolm Sawyer, 2002. "The Euro: Reflections on the first three years," International Review of Applied Economics, Taylor & Francis Journals, vol. 16(1), pages 1-17.
  8. Eckhard Hein, 2005. "Die NAIRU – eine post-keynesianische Interpretation," Macroeconomics 0501009, EconWPA.
  9. Jörg Bibow, 2001. "Making EMU Work: Some Lessons from the 1990s," Macroeconomics 0103008, EconWPA.
  10. Christopher Allsopp, 2002. "The Future of Macroeconomic Policy in the European Union," Discussion Papers 07, Monetary Policy Committee Unit, Bank of England.
  11. Robert Franzese, 2001. "Strategic Interactions of Monetary Policymakers and Wage/Price Bargainers: A Review with Implications for the European Common-Currency Area," Empirica, Springer, vol. 28(4), pages 457-486, December.
  12. Alain Borghijs & Sjef Ederveen & Ruud de Mooij, 2003. "European Wage Coordination: Nightmare or dream to come true?," Economics Working Papers 020, European Network of Economic Policy Research Institutes.
  13. Buti, Marco & Eijffinger, Sylvester C W & Franco, Daniele, 2003. "Revisiting the Stability and Growth Pact: Grand Design or Internal Adjustment?," CEPR Discussion Papers 3692, C.E.P.R. Discussion Papers.
  14. Eckhard Hein & Achim Truger, 2005. "What ever happened to Germany? Is the decline of the former European key currency country caused by structural sclerosis or by macroeconomic mismanagement?," Macroeconomics 0501007, EconWPA.
  15. Lars Calmfors, 2001. "Wages and Wage-Bargaining Institutions in the Emu : A Survey of the Issues," CESifo Working Paper Series 520, CESifo Group Munich.
  16. Allsopp, Christopher & Vines, David, 1998. "The Assessment: Macroeconomic Policy after EMU," Oxford Review of Economic Policy, Oxford University Press, vol. 14(3), pages 1-23, Autumn.
  17. Ilian Mihov, 2001. "Monetary policy implementation and transmission in the European Monetary Union," Economic Policy, CEPR;CES;MSH, vol. 16(33), pages 369-406, October.
  18. Calmfors, Lars, 1998. "Macroeconomic Policy, Wage Setting and Employment - What Difference Does the EMU Make?," Seminar Papers 657, Stockholm University, Institute for International Economic Studies.
  19. Robert Solow, 2000. "Unemployment in the United States and in Europe - A Contrast and the Reasons," CESifo Working Paper Series 231, CESifo Group Munich.
  20. repec:ner:tilbur:urn:nbn:nl:ui:12-176184 is not listed on IDEAS
  21. Christopher Allsopp & Michael J. Artis, 2003. "The Assessment: EMU, Four Years On," Oxford Review of Economic Policy, Oxford University Press, vol. 19(1), pages 1-29.
  22. Jorg Bibow, 2001. "Making EMU Work: Some Lessons from the 1990s," Economics Working Paper Archive wp_326, Levy Economics Institute.
  23. repec:ner:tilbur:urn:nbn:nl:ui:12-152958 is not listed on IDEAS
  24. Philip Arestis & Malcolm Sawyer, 2003. "Making the Euro Work," Challenge, M.E. Sharpe, Inc., vol. 46(2), pages 80-96, March.
  25. 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.
  26. Marc Lombard, 2000. "Restrictive Macroeconomic Policies and Unemployment in the European Union," Review of Political Economy, Taylor & Francis Journals, vol. 12(3), pages 317-332.
  27. Otmar Issing, 2002. "On Macroeconomic Policy Co-ordination in EMU," Journal of Common Market Studies, Wiley Blackwell, vol. 40(2), pages 345-358, 06.
  28. Eichengreen, Barry, 1998. "European Monetary Unification: A Tour d'Horizon," Oxford Review of Economic Policy, Oxford University Press, vol. 14(3), pages 24-40, Autumn.
  29. David Soskice & Torben Iversen, 2001. "Multiple Wage Bargaining Systems in the Single European Currency Area," Empirica, Springer, vol. 28(4), pages 435-456, December.
  30. Jorg Bibow, 2001. "Making EMU Work: Some lessons from the 1990s," International Review of Applied Economics, Taylor & Francis Journals, vol. 15(3), pages 233-259.
  31. Robert Solow, 2000. "Unemployment in the United States and in Europe : a contrast and the reasons ; the European unemployment problem," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 1(1), pages 3-5, October.
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