Can Structural Reforms Help Europe?∗
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چکیده
Structural reforms that reduce product and labor market markups in peripheral Europe by 10 percentage points can improve competitiveness in that region and boost unionwide output by almost 5%. If implemented during a crisis that takes the nominal interest rate to its lower bound, however, these reforms have short-run contractionary effects of more than 1% on impact, thus deepening the recession. Absent the appropriate monetary stimulus, reforms fuel expectations of prolonged deflation, increase the real interest rate, and depress aggregate demand. Our findings have implications for the current debate on the design of reforms in Europe. ∗Prepared for the 2013 Carnegie-NYU-Rochester Conference on “Fiscal Policy in the Presence of Debt Crises.” Thanks to M. Henry Linder for excellent research assistance. The views expressed in this paper do not necessarily reflect the position of the Federal Reserve Bank of New York or of the Federal Reserve System. “...the biggest problem we have for growth in Europe is the problem of lack of competitiveness that has been accumulated in some of our Member States, and we need to make the reforms for that competitiveness. ...to get out of this situation requires...structural reforms, because there is an underlying problem of lack of competitiveness in some of our Member States.” José Manuel Durão Barroso President of the European Commission Closing Remarks following the State of the Union 2012 Strasbourg, September 12, 2012
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تاریخ انتشار 2013