English, Article, Journal or magazine article edition: Overheating in Small Euro Area Economies: Should Fiscal Policy React? Peter Hoeller; Claude Giorno; Christine de la Maisonneuve

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Bookmark: http://trove.nla.gov.au/version/136525
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Overheating in Small Euro Area Economies: Should Fiscal Policy React?
Author
  • Peter Hoeller
  • Claude Giorno
  • Christine de la Maisonneuve
Physical Description
  • preprint
Notes
  • This paper reviews first the fiscal policy recommendations by the EU, the IMF and the OECD for Finland, Greece, Ireland, Luxembourg, the Netherlands, Portugal and Spain. All these countries had inflation above the euro area average in early 2001, some by a considerable margin. The fiscal policy prescriptions deviate little, the EU, the IMF and the OECD generally recommending an active use of fiscal policy. There are some exceptions, however. The next section examines indicators of excess demand in these countries. This is followed by a review of the factors that help or hinder market-based adjustment, including simulations to gauge their effect. Market-based adjustment to demand shocks depends critically on whether the effect of a lower real interest rate is strong relative to the loss in competitiveness, on the size of wealth effects, on wage and price setting behavior, on the supply response and on the strength of trade integration. Simulations suggest that market-based ... Surchauffe dans les petites économies de la zone euro : La politique budgétaire devrait-elle réagir ? Cet article passe d’abord en revue les recommandations de politique budgétaire de l’UE, du FMI et de l’OCDE concernant la Finlande, la Grèce, l’Irlande, le Luxembourg, les Pays-Bas, le Portugal et l’Espagne. Tous ces pays avaient une inflation supérieure à la moyenne de la zone euro au début de 2001, dans certains cas de façon très marquée. Dans ce contexte, les prescriptions de politique économique de l’UE, du FMI et de l’OCDE à ces pays ne diffèrent guère et recommandent en général une utilisation active de l’instrument budgétaire. Des exceptions existent cependant. La deuxième partie de cet article examine les indicateurs d’excès de demande dans ces pays. Elle est suivie d’une revue des facteurs qui favorisent ou empêchent un ajustement de l’économie grâce aux mécanismes de marché à partir notamment de simulations évaluant l’importance de leurs effets. En cas de choc de demande, l’ajustement induit par les forces de marchés dépend de façon cruciale de l’importance relative de ...
  • fiscal policy, politique fiscale, European Union, Union européenne
  • RePEc:oec:ecoaaa:323-en
Language
  • English
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