Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/129042 
Authors: 
Year of Publication: 
2015
Series/Report no.: 
WIFO Working Papers No. 493
Publisher: 
Austrian Institute of Economic Research (WIFO), Vienna
Abstract: 
The euro area has - in contrast to the USA - still not recovered from the "Great Recession" 2009 and the following euro crisis. Some fear that Europe could embark into a decade of "secular stagnation" like Japan in the recent past. The US success can be attributed to the application of the strategy of the "three arrows": a co-ordinated expansionary fiscal and monetary policy cum permanent structural reforms. In contrast, the euro area has its hands tied by a self-imposed restriction in fiscal policy (new fiscal rules). Thus, the euro area remains as a growth-stimulating strategy only an expansionary monetary policy by the ECB plus "structural reforms" at the member country level. Austria - after the expiring of the hitherto "EU growth bonus" - has also to look for new strategies to stimulate growth by its own. In simulations with a macro-growth model for Austria alternative growth scenarios are analysed: structural reforms to improve efficiency in product und labour markets, investment in knowledge and innovation (R&D), more globalisation, and traditional demand policies (monetary and fiscal). The most promising strategies are more globalisation and structural reforms plus R&D investments. Most of these strategies would stimulate growth without impairing fiscal sustainability.
Document Type: 
Working Paper

Files in This Item:
File
Size
1.06 MB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.