Category Archives: Working Groups

About the ADEMU Working Groups

December 18, 2015

The aim of the ADEMU Working Groups is to guarantee the active participation of researchers and Ph.D. students in the project, allowing a mutual exchange of knowledge on the themes analysed. The Working Groups do not exclusively include economists, they also include researchers from other departments and fields of expertise such as Law and Political Science, in short, people who are involved and interested in the ADEMU topics are encouraged to participate.

A list of the current Associated PhD Researchers, who are actively involved in the ADEMU Working Groups is available here

For more information about the topics of the ADEMU Working Groups, please contact or


Marginal Product of Capital across European Regions

November 19, 2015

Venue: EUI, Department of Economics

Akos Valentinyi, Professor at Cardiff Business School and Cardiff University and currently visiting the EUI, presented a research idea about the ‘Marginal Product of Capital across European Regions’. His aim is to evaluate the depth of integration of the capital and financial markets in Europe. Since the work is in a very early stage, it led to an interesting discussion and many suggestions regarding future directions of the project.

The Heterogenous Effects of Government Spending: It’s All About Taxes

November 12, 2015

Venue: EUI, Department of Economics

The paper explores the role which the progressivity of the tax system plays in determining fiscal multipliers, using a framework with heterogeneous households, uninsurable idiosyncratic risk and indivisible labour supply. The results indicate that a higher degree of progressivity in the income tax system results in larger fiscal multipliers. These findings are compared to empirical evidence on the response of output and consumption to changes in military spending in the US, which also suggests that the effect of government spending increases has been more expansionary when tax progressivity is higher.


Fiscal Transfers in a Monetary Union with Sovereign Risk

November 5, 2015

Venue: EUI, Department of Economics

The meeting was composed of two different parts. In the first part, Guilherme de Almeida Bandeira presented his paper “Fiscal Transfers in a Monetary Union with Sovereign Risk”. The work highlights the importance of fiscal transfers as an economic stimulus against the disruptive effects of high sovereign bond spreads on the economy. An increase in sovereign spreads reduces government bonds’ prices held by banks and, as a result, decreases their net worth. Banks respond to this by passing through higher interest rates to firms and, at the same time, by reducing credit supply as a result of binding leverage constraints. Governments can react by implementing an expansionary fiscal policy which, however, comes at the cost of higher government debt, even greater spreads and, hence, an even more fragile banking system. A Fiscal Transfer Scheme (FTS) would instead induce an economic stimulus, and improve welfare, without resulting in higher spreads.

The second part of the meeting was devoted to some clarifications of questions regarding research synergies between partner universities in the ADEMU project, as well as visibility of future scientific work and to some administrative information free project management app.


Reviewing the ADEMU kick-off conference

October 22, 2015

Venue: EUI, Department of Economics

This meeting of the ADEMU working group was dedicated to debriefing and reviewing the ADEMU kick-off conference which took place on October 8-9th in Cambridge (UK). A group member presented a representative selection of conference contributions relating to each work package, namely the contributions of Giancarlo Corsetti (WP1), Morten Ravn (WP2), Christian Hellwig (WP3) and David Levine, Thomas Beukers and Christopher Bickerton (WP4). The presentation led into a discussion on several conference topics. Among them were the future disciplinary role of financial markets on fiscal prudence in EMU economies, the challenges of European demography on monetary policy due to excessive savings as well as the potential of fiscal stress testing to foster surveillance and coordination of public balances. Before closing the meeting, the group organizers shared information regarding opportunities for collaboration among PhD researchers within the framework of ADEMU work packages.


Preparatory event for the ADEMU Kick-Off conference

September 25, 2015

Venue: EUI, Department of Economics

This meeting of the working group served as a preparatory event for the upcoming ADEMU Kick-Off conference (October 8th and 9th). Specifically, it focused on the role and potential of public risk sharing in the EMU. The meeting consisted of two parts: In the first, Anna Rogantini Picco gave a presentation on current EMU public risk sharing mechanisms. Their qualitative description was followed by a quantitative assessment of their effects and a review of recommendations to enhance their performance and scope. The proposals for common unemployment- and deposit-insurance were discussed in detail. In the second part, Professor Ramon Marimon presented his co-authored working paper on the optimal design of a financial stability fund. Among other innovative elements, he emphasized that the paper considers participation constraints of fiscally sound EMU economies. The meeting was concluded by a discussion which considered the policy implications of his results and compared them to alternative proposals.

Review and discussion of the Five Presidents Report

September 17, 2015

Venue: EUI, Economics Department


This meeting was dedicated to a joint review and discussion of the Five Presidents Report (released in June 2015). Johannes Fleck gave a presentation in which he summarized the report’s main statements regarding the current economic condition of the EMU and its proposals concerning the reform and creation of additional common institutions. Moreover, he provided background information on the proposals and the econometric methods used to arrive at empirical results (e.g. smoothing of income shocks via public insurance mechanisms in the EMU) mentioned in the report. The ensuing discussion raised a number of questions such as whether economic convergence is a prerequisite for a joint fiscal insurance mechanism, whether the share of permanent transfers in existing currency unions is substantial and whether income insurance through private markets is a substitute for public insurance schemes.