Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/106114
Authors: 
Horn, Gustav A.
Herzog-Stein, Alexander
Rannenberg, Ansgar
Rietzler, Katja
Tober, Silke
Zwiener, Rudolf
Year of Publication: 
2014
Series/Report no.: 
IMK Report 90
Abstract: 
Effectively ending the crisis in the euro area remains the key policy challenge in 2014. As monetary policy has exhausted its conventional options, fiscal policy is called upon to provide an expansionary impulse by raising public investment. The high level of risk premiums in the crisis-hit countries continues to impair monetary policy transmission. If governments agreed on a temporary debt redemption fund, the ECB could engage in large-scale unconventional policy measures such government bond purchases to cancel out sovereign yield differentials in the euro area. Monetary policy could then stimulate the economy in the crisis-hit countries.The coalition agreement is pointing in the right direction regarding the labor market. The pension proposals, however, are patchwork and unable to solve the fundamental problem of an excessive lowering of the pension level and the concomittant higher risk of old-age poverty.
Abstract (Translated): 
Effectively ending the crisis in the euro area remains the key policy challenge in 2014. As monetary policy has exhausted its conventional options, fiscal policy is called upon to provide an expansionary impulse by raising public investment. The high level of risk premiums in the crisis-hit countries continues to impair monetary policy transmission. If governments agreed on a temporary debt redemption fund, the ECB could engage in large-scale unconventional policy measures such government bond purchases to cancel out sovereign yield differentials in the euro area. Monetary policy could then stimulate the economy in the crisis-hit countries.The coalition agreement is pointing in the right direction regarding the labor market. The pension proposals, however, are patchwork and unable to solve the fundamental problem of an excessive lowering of the pension level and the concomittant higher risk of old-age poverty.
Document Type: 
Research Report

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