Fiscal stabilization in the euro area
•
1 like•328 views
Fiscal stabilization in the euro area by Mahmood Pradhan
Recommended
Recommended
More Related Content
What's hot
What's hot (19)
Similar to Fiscal stabilization in the euro area
Similar to Fiscal stabilization in the euro area (20)
More from OECD, Economics Department
More from OECD, Economics Department (20)
Recently uploaded
Recently uploaded (20)
Fiscal stabilization in the euro area
- 1. Fiscal stabilization in the euro area Mahmood Pradhan Deputy Director, European Department OCED-France Stratégie workshop February 5, 2019
- 2. 1 Euro Area Policy Stance 0 50 100 150 200 250 Euro area United Kingdom United States Japan Gross Public Debt, 2012 (Percent of GDP) -4 -2 0 2 4 6 8 Euro area United Kingdom United States Japan Output Gap and Structural Deficit, 2013 (Percent of potential GDP) Structural deficit Output gap Source: World Economic Outlook.
- 3. 2 Few Euro Area Countries Have Fiscal Space Fiscal Space Assessment (2017) ITA PRT ESP FRA DEU NLD Availability of financing Have sovereign bond spreads breached benchmarks in the last 3 months? 0 0 0 0 0 0 Do debt profile indicators breach benchmarks? Share of public debt held by non-residents 1 1 1 2 2 2 Change in share of short-term debt 0 0 0 0 External financing requirements (percent of GDP) 2 2 2 0 0 State of debt burden indicators Does debt level breach the benchmark during projection period? 2 2 2 2 0 0 Do gross financing needs breach the benchmark during projection period? 2 0 0 0 Desk Bottom-Line 2 2 2 2 0 0 Source: IMF staff.
- 4. 3 Countries With Large Output Gaps Had High Debt Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland Italy Luxembourg Malta Netherlands Portugal Slovak Republic Slovenia Spain 0 50 100 150 200 -16-14-12-10-8-6-4-20 PublicDebt Output gap Public Debt and Output Gap, 2013 (Percent of GDP) Source: World Economic Outlook.
- 5. 4 A Moderately Sized CFC Can Provide Meaningful Stabilization -7 -6 -5 -4 -3 -2 -1 0 t-4 t-2 t t+2 t+4 Impact of Large Shock on Output Gap (Percent of GDP) Without CFC With CFC 0 1 2 t-4 t-2 t t+2 t+4 Size of Fund (Percent of GDP) Build up Draw down Source: IMF staff calculations.
- 6. 5 Not Enough Debt Reduction In Good Times 21 21 36 65 85 99 0 20 40 60 80 100 120 140 1970 1980 1990 2000 2010 France CEPR euro area recessions Debt 49 56 95 100 115 131 0 20 40 60 80 100 120 140 1970 1980 1990 2000 2010 Italy Government debt (percent of GDP) Source: CEPR, AMECO.