Nothing Ventured, Nothing Gained: The Long-Run Fiscal Reward of Structural Reforms
The recent reform of the Stability and Growth Pact provides more leeway for EU governments to temporarily breach the 3% deficit limit if this facilitates the implementation of initially expensive reforms. But the implementation of this principle is not obvious as budgets would need to specify the in...
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| Format: | Elektronisch E-Book |
| Sprache: | English |
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Paris
OECD Publishing
2006
|
| Schriftenreihe: | OECD Economics Department Working Papers
no.493 |
| Schlagworte: | |
| Online-Zugang: | Volltext |
| Zusammenfassung: | The recent reform of the Stability and Growth Pact provides more leeway for EU governments to temporarily breach the 3% deficit limit if this facilitates the implementation of initially expensive reforms. But the implementation of this principle is not obvious as budgets would need to specify the initial and multi-annual budgetary cost and benefit profile of reforms. Budgets should also be explicit about the fiscal cost of inaction to allow a balanced judgment of countries? trade-offs between the various options available. This paper first assesses the information requirements to implement this new form of flexibility built into the Stability and Growth Pact. It then provides simulation exercises to highlight the positive budgetary effects of coordinated structural reforms in the euro area as well as the need for an adequate monetary policy response to make sure that demand adjusts to the improved supply conditions swiftly. The budgetary gains would still depend on the type of reform and their impact on employment and productivity. On the other hand, national policy initiatives by a single country may only have a limited impact, especially in the short term and in the case of a large country. Indeed, in monetary union, the strength of endogenous adjustment mechanisms appears to be weaker in larger countries. Finally, the experience of New Zealand and Australia has shown that the longer-term benefits of reforms both in terms of the budget and overall economic performance are significant. Even so, it is not easy to disentangle the various forces at play. Fundamentally, structural reform and the implementation of smart fiscal frameworks tend to go hand in hand ? indeed may be two sides of the same coin. |
| Beschreibung: | 1 Online-Ressource (28 p.) 21 x 29.7cm. |
| DOI: | 10.1787/658801348663 |
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| spelling | Hoeller, Peter VerfasserIn aut Nothing Ventured, Nothing Gained The Long-Run Fiscal Reward of Structural Reforms Peter, Hoeller and Claude, Giorno = Qui ne risque n'a rien : Les bénéfices budgétaires à long terme des réformes structurelles / Peter, Hoeller et Claude, Giorno Qui ne risque n'a rien Paris OECD Publishing 2006 1 Online-Ressource (28 p.) 21 x 29.7cm. Text txt rdacontent Computermedien c rdamedia Online-Ressource cr rdacarrier OECD Economics Department Working Papers no.493 The recent reform of the Stability and Growth Pact provides more leeway for EU governments to temporarily breach the 3% deficit limit if this facilitates the implementation of initially expensive reforms. But the implementation of this principle is not obvious as budgets would need to specify the initial and multi-annual budgetary cost and benefit profile of reforms. Budgets should also be explicit about the fiscal cost of inaction to allow a balanced judgment of countries? trade-offs between the various options available. This paper first assesses the information requirements to implement this new form of flexibility built into the Stability and Growth Pact. It then provides simulation exercises to highlight the positive budgetary effects of coordinated structural reforms in the euro area as well as the need for an adequate monetary policy response to make sure that demand adjusts to the improved supply conditions swiftly. The budgetary gains would still depend on the type of reform and their impact on employment and productivity. On the other hand, national policy initiatives by a single country may only have a limited impact, especially in the short term and in the case of a large country. Indeed, in monetary union, the strength of endogenous adjustment mechanisms appears to be weaker in larger countries. Finally, the experience of New Zealand and Australia has shown that the longer-term benefits of reforms both in terms of the budget and overall economic performance are significant. Even so, it is not easy to disentangle the various forces at play. Fundamentally, structural reform and the implementation of smart fiscal frameworks tend to go hand in hand ? indeed may be two sides of the same coin. Economics Giorno, Claude MitwirkendeR ctb FWS01 ZDB-13-SOC FWS_PDA_SOC https://doi.org/10.1787/658801348663 Volltext |
| spellingShingle | Hoeller, Peter Nothing Ventured, Nothing Gained The Long-Run Fiscal Reward of Structural Reforms Economics |
| title | Nothing Ventured, Nothing Gained The Long-Run Fiscal Reward of Structural Reforms |
| title_alt | Qui ne risque n'a rien |
| title_auth | Nothing Ventured, Nothing Gained The Long-Run Fiscal Reward of Structural Reforms |
| title_exact_search | Nothing Ventured, Nothing Gained The Long-Run Fiscal Reward of Structural Reforms |
| title_full | Nothing Ventured, Nothing Gained The Long-Run Fiscal Reward of Structural Reforms Peter, Hoeller and Claude, Giorno = Qui ne risque n'a rien : Les bénéfices budgétaires à long terme des réformes structurelles / Peter, Hoeller et Claude, Giorno |
| title_fullStr | Nothing Ventured, Nothing Gained The Long-Run Fiscal Reward of Structural Reforms Peter, Hoeller and Claude, Giorno = Qui ne risque n'a rien : Les bénéfices budgétaires à long terme des réformes structurelles / Peter, Hoeller et Claude, Giorno |
| title_full_unstemmed | Nothing Ventured, Nothing Gained The Long-Run Fiscal Reward of Structural Reforms Peter, Hoeller and Claude, Giorno = Qui ne risque n'a rien : Les bénéfices budgétaires à long terme des réformes structurelles / Peter, Hoeller et Claude, Giorno |
| title_short | Nothing Ventured, Nothing Gained |
| title_sort | nothing ventured nothing gained the long run fiscal reward of structural reforms |
| title_sub | The Long-Run Fiscal Reward of Structural Reforms |
| topic | Economics |
| topic_facet | Economics |
| url | https://doi.org/10.1787/658801348663 |
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