Professor Jonathan Rodden, Stanford University, describes how he has applied his on work on numerous federations in the United States and extracted lessons and principles that could be theoretically applied to the European Monetary Union.
On 8 March 2017, Professor Enrique G Mendoza, Presidential Professor of Economics at the University of Pennsylvania, delivered his lecture ‘The Public Debt Crisis of the United States’ at the European University Institute (EUI).
Hosted by the EUI Economics Department and the Robert Schuman Centre, the lecture formed one of a series of events staged by ADEMU, which also include workshops, conferences and seminars held across Europe.
Professor Mendoza’s lecture examined the five debt crises the United States has experienced since the birth of the republic, defined as year-on-year increases in net federal debt in the 95-percentile.
The EAFS and the policy mix - Marco ButiADEMU_Project
The recovery of the euro area has been particularly slow both by historical and international standards. Nine years after the economic and financial crisis struck, economic activity in the euro area is expanding at a moderate rate. However, the persistence of crisis legacies ─ such as the still-high unemployment rate and weak investment ─ suggest the recovery is not complete.
So far policy actions to support growth have excessively relied on monetary policy, resulting in an unbalanced policy mix. If monetary policy alone cannot lead to balanced growth, is there a case for an expansionary fiscal stance at the aggregate euro area level? Can this be reconciled with the Stability and Growth Pact?
The presentation explores the concept of fiscal space and the effectiveness of fiscal expansion in surplus countries for the euro area’s internal and external adjustment. Finally, it discusses the build-up over the medium term of a fiscal stabilisation function at the central level.
Subnational Debt Management in Brazil and Mexico: Fernando Blanco, Lead Econo...World Bank Publications
General description for each presentation:
Presentation at Ministry of Finance, P.R. China-World Bank Summit on Subnational Debt Management and Restructuring, Nanning, Guangxi Province, P.R. China. October 22, 2015.
On 8 March 2017, Professor Enrique G Mendoza, Presidential Professor of Economics at the University of Pennsylvania, delivered his lecture ‘The Public Debt Crisis of the United States’ at the European University Institute (EUI).
Hosted by the EUI Economics Department and the Robert Schuman Centre, the lecture formed one of a series of events staged by ADEMU, which also include workshops, conferences and seminars held across Europe.
Professor Mendoza’s lecture examined the five debt crises the United States has experienced since the birth of the republic, defined as year-on-year increases in net federal debt in the 95-percentile.
The EAFS and the policy mix - Marco ButiADEMU_Project
The recovery of the euro area has been particularly slow both by historical and international standards. Nine years after the economic and financial crisis struck, economic activity in the euro area is expanding at a moderate rate. However, the persistence of crisis legacies ─ such as the still-high unemployment rate and weak investment ─ suggest the recovery is not complete.
So far policy actions to support growth have excessively relied on monetary policy, resulting in an unbalanced policy mix. If monetary policy alone cannot lead to balanced growth, is there a case for an expansionary fiscal stance at the aggregate euro area level? Can this be reconciled with the Stability and Growth Pact?
The presentation explores the concept of fiscal space and the effectiveness of fiscal expansion in surplus countries for the euro area’s internal and external adjustment. Finally, it discusses the build-up over the medium term of a fiscal stabilisation function at the central level.
Subnational Debt Management in Brazil and Mexico: Fernando Blanco, Lead Econo...World Bank Publications
General description for each presentation:
Presentation at Ministry of Finance, P.R. China-World Bank Summit on Subnational Debt Management and Restructuring, Nanning, Guangxi Province, P.R. China. October 22, 2015.
Fiscal Rules and Debt Restructuring: The European Union Experience - Country ...World Bank Publications
Dr. Christoph Ungerer & Dr. Lili Liu, Macroeconomics & Fiscal Management (MFM) Global Practice, Governance Global Practice, Equitable Growth, World Bank.
Presentation at Ministry of Finance, P.R. China-World Bank Summit on Subnational Debt Management and Restructuring, Nanning, Guangxi Province, P.R. China. October 22, 2015.
The non-partisan Committee for a Responsible Federal Budget (CRFB) has compiled a brief background on the scope of our nation's fiscal challenges and the drivers of our debt and deficits, while outlining some of the types of solutions available to address the problems. This Powerpoint is meant to offer an objective, easily-accessible view of our country's fiscal situation as an educational tool meant to help foster open and honest discussion about these issues.
Subnational Debt: the Case of the Russian Federation: John Litwack, Lead Econ...World Bank Publications
Presentation at Ministry of Finance, P.R. China-World Bank Summit on Subnational Debt Management and Restructuring, Nanning, Guangxi Province, P.R. China. October 22, 2015.
Lessons for Borrowing Policy and Subnational Risks Management - Lessons from ...World Bank Publications
Presentation at Ministry of Finance, P.R. China-World Bank Summit on Subnational Debt Management and Restructuring, Nanning, Guangxi Province, P.R. China. October 22, 2015.
Charles Brendon (Cambridge) discusses the paper of Alessandro Dovis and Rishabh Kirpalani: 'Fiscal rules, bailouts and reputation in federal governments'
Fiscal Adjustment and Subnational Borrowing Regulations: Jorge Martinez-Vazqu...World Bank Publications
Presentation at Ministry of Finance, P.R. China-World Bank Summit on Subnational Debt Management and Restructuring, Nanning, Guangxi Province, P.R. China. October 22, 2015.
As the global financial crisis entered its most dramatic phase, in the second half of 2008, the International Monetary Fund (IMF), many governments and several distinguished scholars advocated expansionary fiscal olicy as the second most effective tool (after monetary stimulus) to fight deep recession and deflation. Now, more than a year later, the previous excitement surrounding the supposed power of fiscal stimulus largely disappeared and instead has been replaced by ising concerns over the sustainability of public finances in many countries. Unfortunately, the previous enthusiasts of the active counter‐cyclical fiscal policy have not always realized the causality between the two.
Authored by: Marek Dąbrowski
Published in 2009
The public debt crisis is not limited to Greece or to the Euro area. In fact, several developed economies face rapidly growing debt-to-GDP ratios, which raise doubts about their long-term solvency. Thus, suggesting that the Eurozone is undergoing a currency crisis or is in danger of disintegration is not the right diagnosis (or at least premature). However, if prudent fiscal policies, fiscal discipline and far-reaching structural reforms are not undertaken soon, both the EU and EMU may face serious internal tensions and obstacles to future economic growth.
Authored by: Marek Dąbrowski
Published in 2010
René Smits: Are current fiscal rules credible? ADEMU_Project
Are current fiscal rules credible? What is the role of fiscal rules and of independent fiscal councils? Rene Smit's slides from the ADEMU 'How much of a fiscal union for the EMU' conference.
Debt Restructuring, Institutions, and Markets: Dr. Lili Liu, Global Lead, Dec...World Bank Publications
Presentation at Ministry of Finance, P.R. China-World Bank Summit on Subnational Debt Management and Restructuring, Nanning, Guangxi Province, P.R. China. October 22, 2015.
A dynamic theory of sovereign debt and structural reforms with three interacting frictions: limited enforcement, limited commitment, and incomplete markets.
Sustainable economic and monetary union in Europe ADEMU_Project
Starting from a legal-institutional perspective, the lecture sketched out the major challenges for researchers and policymakers alike. It also looked at the areas of economic governance, monetary union and banking union with a view to the sustainability of Europe’s Economic and Monetary Union.
Fiscal Rules and Debt Restructuring: The European Union Experience - Country ...World Bank Publications
Dr. Christoph Ungerer & Dr. Lili Liu, Macroeconomics & Fiscal Management (MFM) Global Practice, Governance Global Practice, Equitable Growth, World Bank.
Presentation at Ministry of Finance, P.R. China-World Bank Summit on Subnational Debt Management and Restructuring, Nanning, Guangxi Province, P.R. China. October 22, 2015.
The non-partisan Committee for a Responsible Federal Budget (CRFB) has compiled a brief background on the scope of our nation's fiscal challenges and the drivers of our debt and deficits, while outlining some of the types of solutions available to address the problems. This Powerpoint is meant to offer an objective, easily-accessible view of our country's fiscal situation as an educational tool meant to help foster open and honest discussion about these issues.
Subnational Debt: the Case of the Russian Federation: John Litwack, Lead Econ...World Bank Publications
Presentation at Ministry of Finance, P.R. China-World Bank Summit on Subnational Debt Management and Restructuring, Nanning, Guangxi Province, P.R. China. October 22, 2015.
Lessons for Borrowing Policy and Subnational Risks Management - Lessons from ...World Bank Publications
Presentation at Ministry of Finance, P.R. China-World Bank Summit on Subnational Debt Management and Restructuring, Nanning, Guangxi Province, P.R. China. October 22, 2015.
Charles Brendon (Cambridge) discusses the paper of Alessandro Dovis and Rishabh Kirpalani: 'Fiscal rules, bailouts and reputation in federal governments'
Fiscal Adjustment and Subnational Borrowing Regulations: Jorge Martinez-Vazqu...World Bank Publications
Presentation at Ministry of Finance, P.R. China-World Bank Summit on Subnational Debt Management and Restructuring, Nanning, Guangxi Province, P.R. China. October 22, 2015.
As the global financial crisis entered its most dramatic phase, in the second half of 2008, the International Monetary Fund (IMF), many governments and several distinguished scholars advocated expansionary fiscal olicy as the second most effective tool (after monetary stimulus) to fight deep recession and deflation. Now, more than a year later, the previous excitement surrounding the supposed power of fiscal stimulus largely disappeared and instead has been replaced by ising concerns over the sustainability of public finances in many countries. Unfortunately, the previous enthusiasts of the active counter‐cyclical fiscal policy have not always realized the causality between the two.
Authored by: Marek Dąbrowski
Published in 2009
The public debt crisis is not limited to Greece or to the Euro area. In fact, several developed economies face rapidly growing debt-to-GDP ratios, which raise doubts about their long-term solvency. Thus, suggesting that the Eurozone is undergoing a currency crisis or is in danger of disintegration is not the right diagnosis (or at least premature). However, if prudent fiscal policies, fiscal discipline and far-reaching structural reforms are not undertaken soon, both the EU and EMU may face serious internal tensions and obstacles to future economic growth.
Authored by: Marek Dąbrowski
Published in 2010
René Smits: Are current fiscal rules credible? ADEMU_Project
Are current fiscal rules credible? What is the role of fiscal rules and of independent fiscal councils? Rene Smit's slides from the ADEMU 'How much of a fiscal union for the EMU' conference.
Debt Restructuring, Institutions, and Markets: Dr. Lili Liu, Global Lead, Dec...World Bank Publications
Presentation at Ministry of Finance, P.R. China-World Bank Summit on Subnational Debt Management and Restructuring, Nanning, Guangxi Province, P.R. China. October 22, 2015.
A dynamic theory of sovereign debt and structural reforms with three interacting frictions: limited enforcement, limited commitment, and incomplete markets.
Sustainable economic and monetary union in Europe ADEMU_Project
Starting from a legal-institutional perspective, the lecture sketched out the major challenges for researchers and policymakers alike. It also looked at the areas of economic governance, monetary union and banking union with a view to the sustainability of Europe’s Economic and Monetary Union.
Putting the cycle back into business cycle analysisADEMU_Project
From the ADEMU Project: Paul Beaudry, Dana Galizia and Franck Portier's presentation from the New Developments in Macroeconomics lecture held at UCL on 9 November 2016.
Consumption and house prices in the Great Recession: model meets evidenceADEMU_Project
From the ADEMU project series of lectures, Greg Kaplan, Kurt Mitman and Gianluca Violante examine the property boom-bust, and ask whether it could have been cushioned by a debt-forgiveness policy. Taken from the New Developments in Macroeconomics lecture at UCL London, November 2016
An immersive workshop at General Assembly, SF. I typically teach this workshop at General Assembly, San Francisco. To see a list of my upcoming classes, visit https://generalassemb.ly/instructors/seth-familian/4813
I also teach this workshop as a private lunch-and-learn or half-day immersive session for corporate clients. To learn more about pricing and availability, please contact me at http://familian1.com
Thirty years of growing income inequality, corporate tax cuts and personal tax breaks for the wealthy have undermined the livelihood of working people and set up a state budget crisis which does not need to
exist. We present alternative tax proposals and issue a warning of the ominous consequences of privatization, layoffs and state service cuts for all New Yorkers.
As with most things in economics, taxation is a mixed blessing. It.docxfredharris32
As with most things in economics, taxation is a mixed blessing. It is a blessing for those who receive dollars from taxpayers, which is about 40% of the population; and it is a nuisance for those who have to pay the taxes. The objective of this unit is to help you understand taxes and understand how they affect your life and the economy.
The income tax system began in earnest in 1913 with the Sixteenth Amendment to the Constitution that gave Congress legal authority to tax income. A rudimentary income tax system was tried during the Civil War but was eventually declared unconstitutional. There was no income tax during the high watermark of America's industrial capitalism, beginning in about 1870 and continuing to 1910. If you made money in that era, you kept it. Many of the most famous capitalist names emerge from this era: Rockefeller, Carnegie, McCormick, Swift, and Vanderbilt.
Two major disasters in our economic history, the Great Depression and World War II, changed the role of taxation and government forever. Beginning in the mid-1930s, following the ideas of John Maynard Keynes, the U.S. government began to spend money much more aggressively. In the past, government believed mostly in a balanced budget, but that changed when the Great Depression lingered for an entire decade.
Later, to finance a two-front, world war, taxes were raised to about 90%. Thus began the era of big taxes to pay for big government. Taxes, of course, have fallen from that lofty peak to a more modest 35% marginal tax rate at present, but the number of taxes has increased exponentially. All but six states have an income tax; likewise, many counties and cities have an income tax.
Though there are many ways to slice the tax onion, perhaps the best is the following:
Progressive taxes: This is a tax system in which tax rates increase as income increases. In other words, the more money you make, the more taxes you pay. This system places a greater burden on those best able to pay and almost no burden on the poor. For example, according to Internal Revenue Service (IRS) statistics, the top 50% of earners pay 97% of the taxes. The top 1% of earners pays 30% of all income taxes. On the other hand, over fifty million people, or one-third of the adult population in the United States, pay no taxes whatsoever.
Regressive taxes: In theory, these are the opposite of progressive taxes; these tax strategies fall more heavily on the poor. Common sense would suggest that these would be rarely used in a well-organized economy, but in fact, they are among the most commonly used because of their relative invisibility. Sometimes called the nickel and dime tax, regressive taxes tend to be small for each individual event; therefore, they are not widely noted. A good example of a regressive tax is the sales tax. It takes a much larger percentage of a poor person’s income than the income of someone of wealth. The reason there is no protest is that it takes such a small amount of money on ...
Fiscal Austerity & the Federal System (Paul Posner, 2013 ABFM Conf)PublicFinanceTV
"Fiscal Austerity & the Federal System" presentation by Paul Posner, George Mason Unviersity, presented during "Sequestration's Impact on State Budgets" plenary session, 2013 ABFM Annual Conference, October 3, 2013
Monetary policy is an important public policy, but it is not the only one to stabilize our economy and reduce its business cycles. The leading central bank, the Federal Reserve of the U.S., has introduced, after the 2008 global financial crisis, new instruments and unusual facilities to implement its new innovative monetary policy. The financial world and mostly the social scientists watch as the Federal Open Market Committee (FOMC) decides on a target interest rate in the federal funds market for the next period. The framework that the FOMC uses to implement monetary policy has changed over the last twelve years and continues to evolve today. Here, we try to evaluate the new instruments and their “effectiveness”. Before the 2008 financial crisis, policymakers used one set of traditional instruments (tools) to achieve the target rate. However, several policy interventions, introduced soon after the crisis, drastically altered the landscape of the federal funds market and the traditional economic theory. This new and uncertain environment, with enormous reserves and even interest on reserves, necessitated a new set of instruments by the Fed for its monetary policy implementation. Lately, after seven years of zero interest rate, the FOMC began in December 2015 to increase the target rate and then, went back again to a lower one, but many questions arise. How did they evaluate the effectiveness of these new instruments? Is the current federal funds rate the appropriate one for our economic wellbeing? How efficient was so far this ZIR monetary policy after the latest global financial crisis? Why the Fed put all these burdens of its ‘innovated” new monetary policy to the poor taxpayers (bail out) and to the risk-averse depositors (bail in)? Is it possible for the Fed’s policy to prevent the future financial crises? The federal funds rate was very low and affected negatively the financial markets (bubbles were growing), the real rates of interest (it is negative for twelve years), and the deposit rates (they are closed to zero for twelve years). The redistribution of wealth of depositors and taxpayers continues, which means the true economic welfare is falling and a new global recession was in preparation, if the current unfair easy money policy will persist, ignoring the necessity of a prevention of financial crises. Then, it came as an unexpected plague the coronavirus pandemic, following with a new but, the worse in economic history global crisis (chaos).
Ademu at the European Parliament, 27 March 2018ADEMU_Project
ADEMU scientific co-ordinator Ramon Marimon joined Marco Buti, director general of DG-ECFIN, DG Economic and Financial Affairs, Roberto Gualtieri, MEP and chair of the Committee on Economic and Monetary Affairs at the European Parliament, Maria Kayamanidou, deputy head of DG Research and Innovation at the EC, and Vincenzo Grassi, secretary general of the European University Institute, to discuss ADEMU's proposals for the European Unemployment Insurance System (EUIS) and the European Stability Fund (ESF).
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
The Evolution of Non-Banking Financial Companies (NBFCs) in India: Challenges...beulahfernandes8
Role in Financial System
NBFCs are critical in bridging the financial inclusion gap.
They provide specialized financial services that cater to segments often neglected by traditional banks.
Economic Impact
NBFCs contribute significantly to India's GDP.
They support sectors like micro, small, and medium enterprises (MSMEs), housing finance, and personal loans.
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
Exploring Abhay Bhutada’s Views After Poonawalla Fincorp’s Collaboration With...beulahfernandes8
The financial landscape in India has witnessed a significant development with the recent collaboration between Poonawalla Fincorp and IndusInd Bank.
The launch of the co-branded credit card, the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card, marks a major milestone for both entities.
This strategic move aims to redefine and elevate the banking experience for customers.
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
2. No monetary union without
fiscal union?
This is often presented as an empirical claim.
Many scholars move quickly to the notion that the Euro
cannot survive without “fiscal union,” and reform efforts
focus on bringing it about.
My main goal: Bring relevant facts from existing fiscal
unions, especially the United States, to the debate.
How likely is fiscal union in the EMU, and how would it
work? What are the key challenges?
3. Overview
Political constraints:
What type of reform is possible?
Rules versus discretion?
Fiscal Unions:
Risk-sharing/stabilization
Grants versus fiscal flows
Redistribution
Endogenous fiscal unions
The reform agenda
9. A new political cleavage
Perceived winners and losers from:
Skill-biased technological change
Globalization
The European Union
Cosmopolitan, knowledge-economy core versus periphery
Across countries and within countries
10. Why does this matter?
Certain forms of centralization are off the table
Sapir and Wolf (2015), Tabellini (2016): “…the fiscal institute
should have the authority to veto national budgets.”
If something like a “fiscal institute” was possible, how
would it work under these constraints?
Rules versus discretion?
Blackmail?
11. Why fiscal union?
Risk-sharing and stabilization in the absence of monetary
policy
The assumption is that member states experiencing high
levels of volatility cannot self-insure via their own fiscal
policy.
A common argument: The center must have the fiscal
capacity to smooth asymmetric shocks:
Key question: rules versus discretion?
Otherwise, shocks are too likely to turn into debt crises.
12. Lessons from fiscal unions
Risk-sharing and stabilization
Fiscal flows
Grants
A case study of the Great Recession
Redistribution
Income
Representation
Economic geography
Endogenous fiscal unions
13. Stabilization and fiscal
flows
A large literature:
Sali-i-Martin & Sachs (1992), Bayoumi & Masson (1995), Brunila et
al (2003), Von Hagen (1992, 2007), Melitz & Zumer (1998),
Obstfeld & Peri (1998), Sorensen & Yosha (1997), van Wincoop
(1995), Feyrer & Sacerdote (2013), Malkin & Wilson (2013).
In the United States, a $1 decrease in a state’s real per capita
income is associated with a decrease in net fiscal contributions in
the range of $0.25 - $0.40.
An important result that has not been emphasized in the literature
on EMU:
This is driven completely by the tax side. There is no
disproportionate increase in federal receipts in states experiencing
downturns.
Federal expenditures are uncorrelated with state income, but tax
payments are highly correlated.
Implications for EMU?
14. Grants versus fiscal flows
A highly progressive tax system and a system of inter-
personal expenditures seems highly unlikely in the EMU
given political constraints and lack of administrative
capacity.
Most “fiscal union” proposals involve lump-sum grants to
member states.
So let’s take a closer look at grants.
16. What about the great
recession?
Common perception is that federal automatic stabilizers
kicked in and prevented Euro-style fiscal crises from
emerging in troubled states.
In fact, American Recovery and Reinvestment Act was
highly discretionary and highly unusual.
17. How did the stimulus work?
Following the approach of Gros & Belke (2015), let’s focus
on some of the states that were hardest hit by the Great
Recession:
Arizona
Florida
Nevada
What happened to their tax revenues?
Federal grants?
Federal direct expenditures?
18. Real per capita income in the states hardest hit by the Great
Recession
35. To summarize:
Grants typically fall during recessions, but direct
expenditures increase and federal taxes decrease.
The 2009 stimulus was different. Large, discretionary
spike in grants in addition to direct expenditures.
But the grants were not nearly enough to replace falling
state revenues.
Discretionary federal assistance was very poorly targeted.
Expenditure cuts were very large, and undermined a large
part of the stimulus.
Member state fiscal policy in EU is more stabilizing than
that of U.S. states, whose fiscal policy is extremely pro-
cyclical.
36. The U.S. states are not
unusual
Source: Rodden and Wibbels (2010)
37. Redistribution
Why can’t the federal government target states most
effected by recessions?
This raises a set of questions about the political economy
of redistribution.
38. Average income and transfers (1990-2005)
Size of marker reflects
relative per-capita
representation
39. Income, representation, and federal transfers to Brazilian states, 2005-2013
Size of marker
corresponds to
seats per
capita
40. Why are grants often not
progressive?
In a legislative bargaining model, small states are
attractive coalition partners.
Votes can be purchased for lower price
This can easily undermine progressivity if small states are
not also poor
43. Representation and
Redistribution
Formulaic equalization does not undermine this effect.
It is often built into formulae that are difficult to renegotiate
Causality?
Maybe over-represented states had more leverage at the
moment of federation formation
But the relationship is still very strong among provinces that
were not parties to the initial bargain
Including new EU member states
44. Endogenous fiscal unions
In a bargaining model of union formation or renegotiation, a
member state’s outside options should shape its voting weight
and future flow of transfers
See, e.g. Morelli
Over-representation and commitment to future transfers are
often meant to assuage fears of exploitation by small and
peripheral units at the stage of federation formation.
Small provinces experiencing the most volatility are often over-
represented and favored in the flow of transfers. The initial
bargain is very sticky.
No precedent for radical reorientation of voting weights in favor
of low-volatility units.
45. Is it true that there are no monetary
unions without fiscal union?
If the relevant definition of fiscal union means progressive
taxation and counter-cyclical expenditures, yes.
Canada and the United States before World War II.
Under what conditions can “fiscal union” be achieved?
Is war a necessary condition?
46. WWI New Deal
WWIII
Koreaa
Federal expenditures as a share of total (federal, state, municipal)
expenditures in the United States, 1900 to present
47. WW
I
New DealWWII Korea
Federal expenditures as a share of total (federal, state, municipal)
expenditures in Canada, 1930 to 1970
WWII Korea
48. European fiscal union?
Many reform proposals call for unrealistic levels of
peacetime fiscal centralization.
Recognizing the moral hazard problem, many proposals
also call for unrealistic (and unprecedented) loss of fiscal
sovereignty for member states.
Unrealistic expectations about delegation to “experts.”
Is there strong evidence to suggest the Euro is doomed
without American-style fiscal union?
Would Florida and Arizona have had a Greek-style crisis if
they were solely responsible for Social Security, Medicare,
and Medicaid?
49. A realist reform agenda
The U.S. experience reveals that banking union is crucial
Gros and Belke (2015)
Enhanced facility for fiscal stabilization by member states?
Reduce debt overhang
Alexander Hamilton as an example
Debt assumption first, fiscal union later
Orderly default process
Loss of sovereignty as part of Bankruptcy
A role for the judiciary?
