Structural reforms at the zero bound

Vogel, Lukas

doi:10.1016/j.ejpoleco.2016.08.009

Cited by 18 publications

(16 citation statements)

References 32 publications

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“…In their basic New Keynesian framework, reforms are automatically deflationary. Building on this, Gerali, Notarpietro, and Pisani (2015) and Vogel (2014) show that investment dynamics affect the response of inflation to exogenous markup reductions. Andres, Arce and Thomas (2014) model reforms similarly as exogenous markup cuts and study their consequences in an environment of debt deleveraging.…”

Section: Introductionmentioning

confidence: 90%

Market reforms in the time of imbalance

Cacciatore

Akcigit

Fiori

et al. 2016

Journal of Economic Dynamics and Control

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We study the consequences of product and labor market reforms in a two-country model with endogenous producer entry and labor market frictions. We focus on the role of business cycle conditions and external constraints at the time of reform implementation (or of a credible commitment to it) in shaping the dynamic effects of such policies. Product market reform is modeled as a reduction in entry costs and takes place in a non-traded sector that produces services used as input in manufacturing production. Labor market reform is modeled as a reduction in firing costs and/or unemployment benefits. We find that business cycle conditions at the time of deregulation significantly affect adjustment. A reduction of firing costs entails larger and more persistent adverse short-run effects on employment and output when implemented in a recession. By contrast, a reduction in unemployment benefits boosts employment and output by more in a recession compared to normal times. The impact of product market reforms is less sensitive to business cycle conditions. Credible announcements about future reforms induce sizable short-run dynamics, regardless of whether the announcement takes place in normal times or during an economic downturn. Whether the immediate effect is expansionary or contractionary varies across reforms. Finally, lack of access to international lending in the wake of reform can amplify the costs of adjustment.

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Section: Introductionmentioning

confidence: 90%

Market reforms in the time of imbalance

Cacciatore

Akcigit

Fiori

et al. 2016

Journal of Economic Dynamics and Control

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“…The causes of eurozone sovereign debt are not systemic but reside within the domestic environment of states. Sound fiscal policies are considered essential to sustain recovery, provide policy flexibility against new economic shocks, and avoid primary fiscal deficits. Last, there is a need to speed up structural reforms (Vogel ) in diversified sectors such as health, pensions, and protected professional activities, as well as to increase the flexibility of labor and product markets (Bouis and Duval ) targeting positive results on growth, employment, and productivity (D'Auria et al . ; Varga, Roeger, and Veld ).…”

Section: The Pillars Of Current Economic Adjustment Programs In the Ementioning

confidence: 99%

The Political Economy of Economic Adjustment Programs in the Eurozone: A Detailed Policy Analysis

Hazakis

2015

Politics & Policy

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The euro area debt crisis has pointed more than ever before to the importance of effective reforms and sustainable macroeconomics. Indeed, rising doubts that Eurozone countries with low industrial competitiveness will be able to repay high international liabilities render adjustment a cardinal issue for European cohesion. Evidently, a compelling necessity exists for well‐designed Economic Adjustment Programs (EAPs). This article proposes an ideal EAP type of how to perceive the main stages of adjustment within the Eurozone, underlining their operational/cognitive links as well as the required catalysts for success implementation of adjustment strategy. The proposed holistic adjustment framework treats macroeconomic, microeconomic, financial, and structural reforms not as isolated issue areas but rather as interdependent and mutually vulnerable issue areas. Emphasis is placed on domestic political economy considerations and the necessary societal reform alliance capable and willing to carry out adjustment. Related Articles Related Media European Commission. . “Memorandum of Understanding between the European Commission Acting on Behalf of the Euro Area Member States and the Hellenic Republic.” http://ec.europa.eu/economy_finance/eu_borrower/mou/2012-03-01-greece-mou_en.pdf European Commission. . “Memorandum of Understanding between the European Commission Acting on Behalf of the European Stability Mechanism and the Hellenic Republic and the Bank of Greece.” http://ec.europa.eu/economy_finance/assistance_eu_ms/greek_loan_facility/pdf/01_mou_20150811_en.pdf European Commission. . “Post‐Programme Surveillance Report, Portugal.” Institutional paper 006. July. Economic and Financial Affairs. http://ec.europa.eu/economy_finance/publications/eeip/pdf/ip006_en.pdf

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“…Many of these areas are classified as "core" and "shared" in the 2018 RoC analysis (see Appendix II). For the 2018 RoC, the following governance and corruption measures are classified as "non-core:" anti-corruption legislation and related criminal codes, establishing and enhancing anti-corruption authorities, and on improving transparency.53 See IMF (2015a),Blanchard and Gali (2010),,Cacciatore and others (2016),Anand and Khera (2016),Munkacsi and Saxegaard (2017),Kugler and Pica (2004),Berger and Danninger (2005),Bokan and Hallett (2008),Lusinyan and Muir (2013),Andres, Arce, and Thomas (2014), Eggertson, Ferrero, andRaffo (2014), Fernandez-Villaverde, Guerrón-Quintana, and Rubio-Ramirez (2014), orVogel (2014), among others. In addition, IMF (2015c) presents case studies.©International Monetary Fund.…”

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confidence: 99%

2018 Review of Program Design and Conditionality

2019

Policy Papers

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Structural reforms at the zero bound

Cited by 18 publications

References 32 publications

Market reforms in the time of imbalance

Market reforms in the time of imbalance

The Political Economy of Economic Adjustment Programs in the Eurozone: A Detailed Policy Analysis

2018 Review of Program Design and Conditionality

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