Author : Mariska Vereecken
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (15 download)
Book Synopsis Alternative Views on Macroeconomic Policy in Europe’s Economic and Monetary Union by : Mariska Vereecken
Download or read book Alternative Views on Macroeconomic Policy in Europe’s Economic and Monetary Union written by Mariska Vereecken and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This research evaluated macroeconomic policy instruments with the ambition to propose views on alternative macroeconomic policy in the European Economic and Monetary Union (EMU) which may eliminate macroeconomic imbalances among member states. To tackle dissimilarities in economic conditions, actions are taken by European and national institutions. Most countries adopted fiscal austerity, attempting to reduce public deficits and debt, while the European monetary authority the European Central Bank (ECB) - uses unconventional policies to stimulate economic investment and growth. An overall finding of this research is that Europes governance surveillance mechanisms lack effectiveness to the extent that the future of the Eurosystem is questioned. Analysis of the impact of fiscal assistance, macroeconomic adjustment programmes and imposed structural reforms have not convincingly demonstrated their effectiveness on the economic performance of stressed member states - the GIPSIC countries. This research described two proposals for alternative macroeconomic policy in the EMU. First, the creation of a common Eurobond mechanism. Within this mechanism - proposed by De Grauwe (2012) - member states jointly issue Eurobonds, increasing shared responsibility of government debts and, with proper measures to curb moral hazard, eliminating free riders using the ECBs function as lender of the last resort. Second, Sinn (2014) and Stiglitz (2016) propose an alternative on macroeconomic policy, following Feldsteins (2010) initial suggestion for a temporary exit for Greece out of the EMU. Such temporary exit provides a stressed country an opportunity to adjust its economic and fiscal conditions back to appropriate and stable levels, ending bail-out procedures of stressed countries imposed by the core member states.