WP3: 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.