A Euro Area Macroeconomic Stabilisation Function: Assessing Options in View of Their Redistribution and Stabilisation Properties

What kind of EU fiscal capacity? Evidence from a randomized survey experiment in five European countries in times of corona

“…We will also investigate support for Commission monitoring and guidance and the handling of potential non-compliance with the program's conditions. 8 There is a fear of moral hazard associated with an EU level macroeconomic stabilization function, for example see Koester and Sondermann (2018) and Burriel et al (2020). Some authors, such as Heijdra et al (2018), argue that there is no need for EU fiscal support arrangements if countries adhere to following the responsible fiscal policies they have committed to.…”

Macroeconomic stabilisation properties of a euro area unemployment insurance scheme

“…Other features include the coverage of the scheme, the economic trigger as well as safeguards to avoid moral hazard and permanent transfers, such as experience rated contributions and claw-back mechanisms. Koester and Sondermann (2018) analyse the effects of differently designed EUI schemes for euro area countries between 2002 and 2014, coming to the conclusion that the degree of stabilisation in general would have been relatively contained given the importance of aggregate shocks during that period, especially if incorporating features that safeguard against moral hazard.…”