Fiscal imbalances and output crises in Europe: will the fiscal compact help or hinder?

Bird, Graham; Mandilaras, Alex

doi:10.1080/17487870.2013.765081

Cited by 23 publications

(8 citation statements)

References 12 publications

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“…The UK is considered to be amongst the strongest economies in this group as the value of nominal GDP is the fifth largest across the globe. The financial crisis of 2008 restricted production and demand in many economies which led to the introduction of contractionary fiscal policies (Batini et al, 2012;Bird and Mandilaras, 2013). The UK was amongst those economies that implemented such policies in order to achieve particular fiscal targets, thus causing a decrease in aggregate demand (Farnsworth, 2011;O'Hara, 2015).…”

Section: Introductionmentioning

confidence: 99%

The Effects of Competition, Liquidity and Exports on Markups: Evidence from the UK Food and Beverages Sector

Amountzias

2017

J Ind Compet Trade

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This study investigates the pricing decisions of the UK food and beverages sector over 2007-2016. The markup model formulated by Hall (1988) and Roeger (1995) is employed where market power is expressed in terms of pricing decisions reflected by the difference between the price level and the marginal cost of production. The analysis is conducted under three steps: the first step estimates the markup ratio of the UK food and beverages sector over 2007-2016; the second step provides the price-cost margin of the 32 4 digit level NACE Rev.2 constituent industries over 2007-2016; and the last step tests the relationship between cross-sectional estimates of market power and the structural effects of concentration, liquidity and exports over 2009, 2011, 2015 and 2016. The results suggest the presence of imperfect competitive conduct in the sector, while the three structural effects appear to have a significant influence on the pricing decisions of the UK food and beverages industries.

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Section: Introductionmentioning

confidence: 99%

The Effects of Competition, Liquidity and Exports on Markups: Evidence from the UK Food and Beverages Sector

Amountzias

2017

J Ind Compet Trade

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“…One disciplining mechanism can be fiscal rules which represent a "permanent constraint of fiscal policy" (Kopits & Symansky, 1998). Bird and Mandilaras (2013) argue that fiscal rules might help to reduce the incidence of fiscal crises. Yet, if they aim at certain deficit or debt quotas, they might also be a constraint on the ability of stabilizing economic activity and unemployment which could have in turn a negative impact on tax revenues and public spending.…”

Section: Discussionmentioning

confidence: 99%

Public debt and borrowing: Are governments disciplined by financial markets?

Afflatet

2016

Cogent Economics & Finance

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Abstract:With the announcement to intervene on financial markets to restore the monetary transmission mechanism, the ECB has attenuated the pressure of the markets on the endangered peripheral countries of the Eurozone. Critics argue that by eliminating the markets' disciplining interest mechanism, governments in the crisis countries will not carry out reforms and consolidate their budgets. This kind of interplay between public deficit policy and financial markets is commonly discussed under the notion of Market Discipline Hypothesis. The hypothesis' second half suggests that governments react to rising interest rates by adjusting their deficit policy. Based on panel data for the European Union, different models are tested to investigate if governments react to rising interest rates. The results indicate that governments do raise their primary surpluses when they perceive the rising interest rates in their budgets. Governments react quite quickly to changing interest rates, although there seems to be some backlash in the medium-run.

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“…Such a precautionary approach may, however, lead to a contractionary fiscal policy that may be unwarranted in some circumstances. Bird and Mandilaras (2013) and Creel et al (2012) underscore that there is an asymmetry in fiscal rules that discourage structural fiscal deficits but not structural fiscal surpluses.…”

Section: The Estimated Structural Balance In Practicementioning

confidence: 99%

Enhanced Fiscal Governance in the European Union: The Fiscal Compact

Kukk

Stæhr

2015

Baltic Journal of European Studies

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Several reforms aiming to strengthen budgetary discipline in the European Union have been implemented since the outbreak of the European debt crisis. Arguably the most important one is the Fiscal Compact, which stipulates that each signatory country must enshrine in domestic legislation an upper limit on the structural budget deficit, that is, the deficit after cyclical and other temporary factors have been excluded. This paper analyses the contents of the Fiscal Compact and discusses challenges for its implementation and efficacy. The conclusion is that the Fiscal Compact may be challenging to implement and enforce because the rules are very complex and require complicated calculations that are subject to very large forecasting uncertainty. The Fiscal Compact could, however, lead to a stronger national commitment to fiscal prudence.

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Fiscal imbalances and output crises in Europe: will the fiscal compact help or hinder?

Cited by 23 publications

References 12 publications

The Effects of Competition, Liquidity and Exports on Markups: Evidence from the UK Food and Beverages Sector

The Effects of Competition, Liquidity and Exports on Markups: Evidence from the UK Food and Beverages Sector

Public debt and borrowing: Are governments disciplined by financial markets?

Enhanced Fiscal Governance in the European Union: The Fiscal Compact

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