ADEMU: work packages and main results

Work Package 1: Long-term sustainability of a monetary and fiscal union

Focus on the long-run sustainability of EMU – in particular the sustainability of sovereign debt, and of union-wide burden-sharing mechanisms.

Specific Objectives:

  1. To clarify the determinants of sovereign debt crises, to develop new indicators that could be used to assess the risk of such crises occurring, and to devise new strategies for reducing this risk.
  2. To devise credible rules and strategies for sustainable public debt management appropriate to the institutional and demographic characteristics of the EU/euro area.
  3. To provide detailed institutional proposals for optimal fiscal risk-sharing among EMU member states, subject to the constraint that participation cannot be enforced, and to contrast these proposals with the existing institutional framework (e.g. the ESM).

Related Policy Briefs:

Related ADEMU Perspectives:

Related Working Papers:

A total of 47 ADEMU Working Papers were related to Work Package 1. The full list with corresponding hyperlinks can be consulted here

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Work Package 2: Stabilization policy in currency unions

Assessment of the short-run stabilizing potential of alternative approaches to conducting fiscal policy in a currency union, so as to improve resilience to macroeconomic shocks

Specific Objectives:

  1. To determine the most appropriate forms of macroeconomic policy coordination among EU and euro area countries, and to quantify the risks associated with uncoordinated policymaking.
  2. To provide an empirical assessment of the multipliers associated with active fiscal policy, and to clarify the theoretical channels through which these multipliers work.
  3. To explore the theoretical channels through which social insurance and labour market policy can serve as automatic stabilising – or destabilising – devices.

Related Policy Briefs:

Related ADEMU Perspectives:

Related Working Papers:

A total of 38 ADEMU Working Papers were related to Work Package 2. The full list with corresponding hyperlinks can be consulted here

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Work Package 3: Macroeconomic and financial imbalances and spillovers

Focus on the macroeconomic and financial interdependencies that are of relevance to reformed institutional governance of the euro area. Attention is placed on two specific categories: international spillovers, particularly those associated with fiscal policy, and macroeconomic and financial imbalances.

Specific Objectives:

  1. To provide new evidence on the cross-border spillover effects of fiscal and financial shocks in the euro area, to understand exactly how these shocks propagate from one country to another, and to explore the implications of this for the conduct of fiscal policy in EU countries.
  2. To assess the role of macroeconomic and financial imbalances in the recent crisis, to analyse the existing institutional mechanisms for controlling such imbalances (in particular the SGP, MIP and EIP), and to consider strategies for their effective improvement, including reform of the European banking sector.

Related Policy Briefs:

Related ADEMU Perspectives:

Related Working Papers:

A total of 23 ADEMU Working Papers were related to Work Package 3. The full list with corresponding hyperlinks can be consulted here

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Work Package 4: Policy Implementation

Assess the practical hurdles associated with implementing institutional reforms for the better management of fiscal policy within the EU, with a particular focus on the legal, political and behavioural constraints that the current EMU fiscal institutional structure – and, in particular, the alternative ADEMU proposals – may face.

Specific Objectives:

  1. To identify the legal and constitutional challenges posed at both a European and national level by recent institutional innovations (including the Fiscal Compact, ESM Treaty and SSM), and to identify similar challenges and potential loopholes associated with the proposals made as part of the ADEMU project.
  2. To explore relevant political economy concerns associated with the fiscal and financial governance of EMU.
  3. To examine experimentally the viability of specific theoretical models and policy proposals considered under the ADEMU project.

Related Policy Briefs

Related ADEMU Perspectives:

Related Working Papers:

A total of 25 ADEMU Working Papers were related to Work Package 4. The full list with corresponding hyperlinks can be consulted here