Chapter 1: The European Economy: Macroeconomic Outlook and Policy
CESifo Group Munich, Munich, 2007
in: EEAG Report on the European Economy 2007, 15-58
This chapter provides a macroeconomic outlook and discusses fiscal and monetary policy options for the euro area. The forecast is one of a mild slowdown in the world economy and a slower – but continued – recovery in the European economy. The need for further fiscal consolidation in the EU countries and for a restructuring of government expenditures in favour of government investment, R&D and education is stressed. A special section analyses how well the common monetary policy has fitted individual countries. The upshot is that there are considerable stabilisation policy costs which have not fallen over time. •
Included in
EEAG Report on the European Economy 2007
CESifo Group Munich, Munich, 2007