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Policy Design and Macroeconomic Stability in Europe

Published online by Cambridge University Press:  26 March 2020

Ray Barrell  and
E. Philip Davis
Ray Barrell*
Affiliation:
National Institute of Economic and Social Research (NIESR)
E. Philip Davis*
Affiliation:
Brunel University and NIESR
*
e-mail: r.barrell@niesr.ac.uk
e-mail: e_philip_davis@msn.com
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Abstract

Macroeconomic policy in Europe is now oriented to creating a stable environment in which the scope for output growth is enhanced. However, we maintain that not all dimensions of a stability-oriented policy framework appear to be in place. Fiscal policy rules and arrangements have been much discussed, but their design is not yet settled. The Single Market Programme has transformed competition in Europe, but its full implications for macroeconomic stability, especially its implications for financial market stability in combination with the Single Currency, have not yet been fully appreciated by policymakers. Future pension issues in the context of population ageing will pose a major challenge. We discuss the design of fiscal policy in (a Single Market) Europe, looking at fiscal pacts and the need for Europe-wide financial regulation in an integrated financial market as well as pension reform aspects.

Keywords

Fiscal PolicyPolicy DesignE61E62
Type
Articles
Information
National Institute Economic Review , Volume 191 , January 2005 , pp. 94 - 105
Copyright
Copyright © 2005 National Institute of Economic and Social Research

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Footnotes

We would like to thank Martin Weale for very useful discussions on these topics. Sylvia Gottschalk, Ali Al Eyd and Olga Pomerantz also made an input to this paper, and we would like to thank them also. Errors remain our own responsibility. The work was financed under ESRC grant L13825012 and by the European Commission.

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