Question 2: Which of the following is the one reform you would choose to improve fiscal rules?
Answer:
Other or no opinion
Confidence level:
Very confident
Comment:
it would be better to focus on a long-run debt target and impose (as intermediate target) a maximum spending growth rule in line with potential output growth and with a correction to reach the long run debt target, if debt currently exceeds it. Fiscal councils can play a useful role, but this strongly depends on their design. Many of them currently too weak. You need to combine EU wide rules with increased responsibility at the national level
Proposition 1: The existing fiscal rules for European Monetary Union members require revision.
Answer:
Strongly agree
Confidence level:
Extremely confident
Comment:
The rules have become complex, intransparent and are applied with substantial arbitrariness
Question 2: What is the best mechanism to pay for economic support provided by and to EU member states to combat the COVID-19 crisis?
Answer:
Expanded EU budget (with possible borrowing at the EU level)
Confidence level:
Confident
Comment:
The EU budget / multi-annual framework has already the infrastructure in place (via the BICC, which also has some conditionality built in). Increasing the "head room" (difference between maximum revenues that can be raised minus current spending commitments) would provide headroom for guarantees for loans to Member States (the headroom probably allows for lending 8 - 12 times over) as well as grants. An appropriate mix of loans and grants to be decided. The composition of the spending of the funds will be as important, where infrastructure spending with a European / cross-border effect could tilt the composition more towards grants relative to loans to Member States.
Question 1: What is the total size of funding that you would advocate at the EU level in support of its members to weather the COVID-19 crisis this year?
Answer:
5-10% of GDP
Confidence level:
Confident
Comment:
Notice that in addition to discretionary expansion there is a dampening effect on the size of about 3.5% coming from the automatic stabilizers. The current discretionary package will obviously not prevent very sharp economic downturn. A recovery fund will be needed to in addition to the measures so far agreed up on. Also the recovery fund will not prevent a very sharp downturn. The size of the recovery fund, and its design (grants versus loan component) will need to take account of the effects on (medium run) debt sustainability. The composition of the recovery fund will also be important. A sufficiently large public investment component or more generally growth-friendly spending component will be important, as these components will generally suffer most from budgetary pressure and the effect is largest for the high debt countries as the experience of the previous crisis has shown. See last autumn's European Fiscal Board review report for a more detailed account.
I think there are transition shifts (such as inflow of new workers, intensifying global competition) hiding the effects of falling unemployment rate on price and wage pressures.
The CFM surveys informs the public about the views held by prominent economists based in Europe on important macroeconomic and public policy questions. Some surveys focus specifically on the UK economy (as the CFM is a UK research centre), but surveys can in principle focus on any macroeconomic question for any region. The surveys shed light on the extent to which there is agreement or disagreement among these experts. An important motivation for the survey is to give a more comprehensive overview of the beliefs held by economists and in particular to include the views of those economists whose opinions are not frequently heard in public debates.
Questions mainly focus on macroeconomic and public policy topics. Although there are some questions that focus specifically on the UK economy, the setup of the survey is much broader and considers questions related to other countries/regions and also considers questions not tied to a specific economy.
The surveys are done in collaboration with the Centre for Economic Policy Research (CEPR).
Fiscal Rules in the European Monetary Union
Question 2: Which of the following is the one reform you would choose to improve fiscal rules?
Proposition 1: The existing fiscal rules for European Monetary Union members require revision.
The Eurozone COVID-19 Crisis: EU Policy Options
Question 2: What is the best mechanism to pay for economic support provided by and to EU member states to combat the COVID-19 crisis?
Question 1: What is the total size of funding that you would advocate at the EU level in support of its members to weather the COVID-19 crisis this year?
Labour Markets and Monetary Policy
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Question 1: Do you agree that a strong labour market is a good indicator of building inflationary pressure?
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