Δεν διατίθεται στα ελληνικά.
Francesca Vinci
- 30 July 2024
- WORKING PAPER SERIES - No. 2962Details
- Abstract
- The European fiscal governance framework remains incomplete, hindering policy coordination during economic shocks and affecting the transmission of the single monetary policy. High public debt and low public investment worsen resilience across Member States. Many policymakers, institutions, and academics support establishing a central fiscal capacity (CFC) as a solution. Against this backdrop, we propose a framework to assess a CFC in the euro area, aimed at stabilizing the business cycle, promoting sovereign debt sustainability, and reducing procyclicality in public investment. Our two-region DSGE model with a permanent CFC allocates resources based on the relative output gap while earmarking funds for public investment and imposing fiscal adjustment requirements for the high-debt region. The CFC enhances business cycle stabilization for both regions and significantly reduces the welfare cost of fluctuations. We also explore European bond issuance and a supranational investment strategy to address investment needs through European Public Goods.
- JEL Code
- E12 : Macroeconomics and Monetary Economics→General Aggregative Models→Keynes, Keynesian, Post-Keynesian
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
F45 : International Economics→Macroeconomic Aspects of International Trade and Finance
- 18 June 2024
- FINANCIAL INTEGRATION AND STRUCTURE BOXFinancial Integration and Structure in the Euro Area 2024Details
- Abstract
- The European Union's FinTech industry has experienced rapid growth since the 2010’s, with a significant concentration of firms in major financial centers. This Box suggests that one of the reasons for the clustering of FinTechs close to financial centres may be easier access to equity finance. The analysis also shows that FinTechs outside financial centres compared to Fintechs that cluster in financial centers need to rely more on their performance as a signalling device to potential funding providers. Given the relevance of incubators and accelerators for early-stage development and funding of FinTech startups, the article points to the need to further investigate the role and effectiveness of institutional support schemes. It also underscores the need to advance on the EU’s capital markets union (CMU) agenda, in particular as regards policy efforts to grow European equity markets, in terms of both liquidity and depth.
- JEL Code
- D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
G3 : Financial Economics→Corporate Finance and Governance
O30 : Economic Development, Technological Change, and Growth→Technological Change, Research and Development, Intellectual Property Rights→General
- 12 June 2024
- WORKING PAPER SERIES - No. 2945Details
- Abstract
- We investigate the impact of expectations about future climate policy on investment decisions of fossil fuel firms. Our empirical analysis reveals that firms with greater exposure to climate change significantly increased their investment in response to the Paris Agreement, in contrast to firms with lower exposure. Importantly, investment was directed towards traditional activities in the fossil fuel industry. By contrast, there are no indications that firms invested to transition towards renewable energy sources nor in making production less carbon-intensive. Our findings contribute to the ongoing discussion about the potential adverse effects of delays in the implementation of climate regulation.
- JEL Code
- G31 : Financial Economics→Corporate Finance and Governance→Capital Budgeting, Fixed Investment and Inventory Studies, Capacity
G38 : Financial Economics→Corporate Finance and Governance→Government Policy and Regulation
Q58 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics→Government Policy
- 3 August 2022
- ECONOMIC BULLETIN - ARTICLEEconomic Bulletin Issue 5, 2022Details
- Abstract
- This article takes stock of the impact of the coronavirus (COVID-19) crisis on business investment dynamics in the euro area and presents evidence on the main drivers of investment, as well as the opportunities, challenges and risks for its recovery, also in investment with respect to digitalisation and greening needs. Euro area business investment fell sharply in the first half of 2020. The considerable rebound and subsequent investment dynamics have been heterogenous across countries and types of investment, and the rebound has been overall somewhat weaker in the euro area than in the United States. While the recovery has been helped by substantial support from monetary and fiscal policy, headwinds such as increased uncertainty, commodity price rises and lingering supply bottlenecks risk delaying investment decisions and leading companies to further increase savings. Meanwhile, spending on further digitalising and “greening” the economy, as reflected in available investment data, has accelerated throughout the pandemic. Investment opportunities in these areas are considerable, and so are the challenges, which are mainly related to financing, regulation and incentives.
- JEL Code
- D25 : Microeconomics→Production and Organizations
E3 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
Q55 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics→Technological Innovation
- 5 October 2021
- WORKING PAPER SERIES - No. 2596Details
- Abstract
- We propose a theoretical framework to reconcile episodes of V-shaped and L-shaped recovery, encompassing the behaviour of the U.S. economy before and after the Great Recession. In a DSGE model with endogenous growth, negative demand shocks destroy productive capacity, moving GDP to a lower trajectory. A Taylor rule policy designed to reduce the output gap may counterbalance the shocks, preventing the destruction of economic capacity and inducing a V-shaped recovery. However, when shocks are deep and persistent enough, like during the Great Recession, they call for a downward revision of potential output measures, the so-called switching-track, weakening the recovering role of monetary policy and inducing an L-shaped recovery. When calibrated to the U.S. economy, the model replicates well the L-shaped recovery and switching-track that followed the Great Recession, as well as the V-shaped recoveries that followed the oil shock recessions.
- JEL Code
- E12 : Macroeconomics and Monetary Economics→General Aggregative Models→Keynes, Keynesian, Post-Keynesian
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
O41 : Economic Development, Technological Change, and Growth→Economic Growth and Aggregate Productivity→One, Two, and Multisector Growth Models
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy