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:
- 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.
- To provide an empirical assessment of the multipliers associated with active fiscal policy, and to clarify the theoretical channels through which these multipliers work.
- To explore the theoretical channels through which social insurance and labour market policy can serve as automatic stabilising – or destabilising – devices.