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.