Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘TCC’

Krugman and DeLong Are Right, Eurotimidity Must Be Defeated. Here Is How

Posted by hkarner - 4. Juli 2016

By on July 1, 2016  RGE EconoMonitor

From Eurotimidity to Euroaudacity

A new proposal has come from a group of leading European economists (the Resiliency Authors) on how to shore up the Eurozone’s resiliency. Their recipe includes diversifying bank portfolios; decreasing banks’ overexposure to domestic loans; transferring the responsibility for banks’ rescue from national governments to the European Stability Mechanism (although the authors consider this option to be politically unfeasible); introducing fiscal expenditure rules (linking expenditure reduction to debt levels); strengthening the ESM, and making it more effective and better coordinated with the ECB; and further adjusting competitiveness with more structural reforms.

Would these measures improve the Eurozone resilience to future bad shocks?

Possibly.

Yet, is resilience the very first priority for the Eurozone at this point in time? Is it really what the Eurozone needs now? Den Rest des Beitrags lesen »

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Fiscal Debit Cards and Tax Credit Certificates: The Best Way to Boost Economic Recovery in Italy (and Other Euro Crisis Countries)

Posted by hkarner - 11. September 2015

 Authors: Biagio Bossone, Marco Cattaneo, Enrico Grazzini & Stefano Labini  ·  September 8th, 2015  ·  RGE EconoMonitor

A fiscal shock to ItalyRecently on this blog, Brunello Rosa had submitted an interesting policy proposal to boost Italy’s GDP.

Brunello’s proposal shares many analytical premises with the one we have articulated in a public appeal published at the end of last year,  concerning the issuance of tax credit certificates as a means to inject new purchasing power in the economy without creating new debt. [1]

We set out to compare the two proposals in today’s comment. This will offer readers a better understanding of their relative pros and cons but even more importantly to our purpose, it will give us an opportunity to discuss key elements of Brunello’s idea, which we think can be usefully incorporated into ours leading to a new much more powerful proposal.

Brunello starts from two premises that we fully share. The first is that Italy’s macroeconomic policy space is heavily limited by institutional constraints and market risks. Not only may Italy no longer use the monetary lever or devalue the exchange rate to pursue macroeconomic adjustment in the face of demand shocks, like any other Eurozone member; it also lacks sufficient fiscal headroom to exercise strong enough stimuli in the event of recession, stagnation or sluggish growth. Even the flexibility granted to Italy by its EU partners under the fiscal compact gives the country margins that are far too inadequate for its needs. Den Rest des Beitrags lesen »

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