The fiscal consolidation efforts of Spain, Italy, and Portugal from 2010 to 2014 did not achieve their goal of reducing the debt-to-GDP ratio in any of the three countries. This Economic Bulletin examines why the spending cuts and tax increases, at times drastic, were unsuccessful and perceptibly contributed to sending the three countries back into recession. The sharp decrease in private household ...
According to the German federal government’s climate protection targets, there will be a continuous reduction of lignite-based electricity well before 2030. Simulations show that the currently authorized lignite mines in eastern Germany would not be fully depleted if the climate protection targets for 2030 were complied with. This makes planning for new mines or the expansion of existing ones superfluous. ...
In spite of persisting unfavorable external economic conditions, the German economy’s upward trend continues, with a growth of 1.2 percent expected for the coming year – slightly less than the 1.8 percent growth rate of 2016, a difference primarily due to the fact that 2017 has fewer workdays. A growth rate of 1.6 percent is expected for 2018. Although employment growth has slowed down somewhat since ...
The world economy is gaining momentum after sluggish growth in the first half 2016 – which was primarily due to a weak expansion in the emerging markets – gave way to a slight acceleration. This trend is likely to continue, and will increasingly benefit the developed economies as well. The brightening labor market situation in advanced countries is leading to a higher level of consumer demand, which ...
Facing deflationary threats, the ECB has engaged in several forms of asset purchase programs to fulfill its mandate of maintaining price stability. A main objective of these programs is raising inflation expectations, as these are a main determinant of actual inflation. This study empirically evaluates the effectiveness of these ECB policies in raisinginflation expectations. The results suggest that ...
The Brexit vote has considerably increased economic uncertainty in Europe and beyond. It will likely affect economic performance and in particular investment in the euro area, which are both already relatively weak. The impact of this uncertainty shock on the euro area and the German economy is estimated with an econometric framework. A counterfactual analysis indicates that the uncertainty associated ...
