Balancing EU social and economic governance through performance management

Hansen, Rasmus Hovedskov; Lovering, Ian Alexander

doi:10.1080/13569775.2022.2044604

Cited by 1 publication

(2 citation statements)

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“…In fact, unemployment was introduced merely to contextualise "real" macroeconomic imbalances. As a result, breaching the early warning threshold on the unemployment indicator did not trigger further Commission analysis in the form of an In-Depth Review (IDR), unlike other indicators like the current account, private debt, or unit labour costs (Hansen & Lovering, 2022).…”

Section: Methodsmentioning

confidence: 99%

“…The first discusses the procedure of the MIP (its legal, institutional, and political aspects as well as the willingness of Member States to actually implement the recommendations of the EC). MIP today may be regarded a broader instrument seeking to make interventions through a range of economic and social indicators (Hansen & Lovering, 2022). The second analyses the indicators included in the scoreboard, especially their ability to predict crises.…”

Section: Literature Reviewmentioning

confidence: 99%

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Predictive strength of Macroeconomic Imbalance Procedure indicators

Biegun,

Dahl,

Karwowski

2024

EiP

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Motivation: The Macroeconomic Imbalance Procedure (MIP) is a key step in the European Semester, aimed at the coordination of the economic policies of the EU Member States to prevent excessive macroeconomic imbalances in the EU and support structural reforms. The MIP was originally envisaged as a legal tool for crisis prevention, allowing macroeconomic imbalances to be detected and then remedied, but is also used as an Early Warning System. However, the real strength of MIP indicators to predict crises has not been proved in practice and is widely contested in the literature.Aim: Fourteen scoreboard (“main”) and 28 auxiliary MIP indicators are currently in use. This paper is aimed at the assessment of the power of all MIP indicators in predicting crises.Results: The added value of our research is to test the MIP’s ability to predict changes in GDP, which may be considered as a proxy for the deterioration or improvement of the economic situation. Very little investigation has been done in this area so far. In addition, to our knowledge, no research papers have investigated the relevance of auxiliary MIP indicators. Our results show that only four main indicators (house price index, nominal unit labour cost index, general government sector debt, and export market shares) and another four auxiliary indicators (residential construction as percentage of GDP, activity rate, people living in households with very low work intensity, and export performance against advanced economies) seem to be able to predict the upcoming crises.

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Section: Methodsmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%