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The German change of attitude concerning fiscal policy and the mutualisation of efforts to fight the pandemic is driven by self-interest, and as such might be structural.The German change of attitude concerning fiscal policy and the mutualisation of efforts to fight the pandemic is driven by self-interest, and as such might be structural.

Since the Global Financial Crisis, the European Union (EU) has gone from crisis to crisis. The chronic growth and productivity problems have been compounded by the poor management of the Eurozone crisis, by the no-longer postponable green and digital transitions, and by the changing geopolitical environment, with the end of the old multilateral order. The European institutions still embed the principles of an old consensus based on market efficiency, and do not allow for macroeconomic and industrial policies for the structural transformation. We discuss possible reforms to realign the EU institutions with the needs and the challenges the bloc faces.

The long season of unconventional monetary policies in advanced economies seems to be coming to an end. How can quantitative easing (QE) be effective where conventional monetary policy fails? How does it work in the peculiar environment of a monetary union? We study this latter case modelling a monetary union as the aggregate of two countries characterized by New Keynesian output and inflation relationships, with a Tobinian money market equation. QE is operated by the single central bank by expanding money supply in exchange for risky assets throughout the union. We assess the stabilization capacity of QE under different types of symmetric and asymmetric shocks, in which case fiscal accommodation at the country level should also intervene.

Our paper investigates the impact of rising inequality in a two-country macroeconomic model with an agent-based household sector characterized by peer effects in consumption. In particular, the model highlights the role of inequality in determining diverging balance of payments dynamics within a currency union. Inequality may drive the two countries into different growth patterns: where peer effects in consumption interact with higher credit availability, rising income inequality leads to the emergence of a debt-led growth. Where social norms determine weaker emulation and credit availability is lower, an export-led regime arises. Eventually, a crisis emerges endogenously due to the sudden-stop of capital flows from the net lending country, triggered by the excessive risk associated with the dramatic amount of private debt accumulated by households in the borrowing country. Monte Carlo simulations for a wide range of calibrations confirm the robustness of our results.

The efficacy of natural enemies in controlling pests under field conditions is largely correlated with their capacity to spread within infested crops. In this study the spatial dispersal of the California red scale parasitoid Aphytis melinus was evaluated in the field after augmentative releases. The experiment was conducted in 2007 in six 1-ha plots in a Sicilian citrus orchard under integrated pest management. A total of 180,000 A. melinus adults was released in each of three plots and the other plots were left as untreated control. The flight range of the parasitoid was evaluated, for 35 days after the release, on 16 trees per each plot, located at 20 and 40 m from the central release point using yellow sticky traps activated with Aonidiella aurantii sexual pheromone and by monitoring the percentage parasitism of the scale on fruits and twigs. The effects of the distance from the release point and density of susceptible stages of host on parasitoid dispersal were evaluated. The number of wasps captured during the whole trial was greater in the traps located 20 m from the release point than in those at 40 m and in the control plots. Aphytis melinus dispersed over distances less than 40 m based on both the lower percentage parasitism and numbers captured recorded at distances of 40 m. The results are discussed in the context of the biological control of California red scale in citrus orchards by means of wasp releases. In particular, the release points should be no more than 40 m apart for a quick and homogeneous colonization of the area treated.

Using descriptive evidence, this paper contributes to the debate on French public finances? consolidation by examining the long-term sustainability of France?s fiscal position. We trace the historical trends of government?s tax receipts and expenditures. We illustrate that while the level of public expenditure in France is larger than in the Euro Area, its trend is comparable to its neighbours. French net debt is comparable to Eurozone?s while French net wealth remains positive. However, the French tax system is not progressive with only 6% of compulsory levies raised that way, and too complex. The paper then acknowledges the efficient debt management of French authorities. As a conclusion, we see no risk of future unsustainability linked to the nature or the level of current French public finances. nema

Faced with the global financial crisis and an increasingly worrisome sovereign-debt crisis, the Eurozone countries are rethinking their fiscal governance. This paper discusses the different reforms and subsequent fiscal rules which have emerged since 2011. It assesses the impact of fiscal rules on the output gap and inflation rate of three representative countries of the Eurozone. By means of a counterfactual, the rules based upon their macroeconomic outcomes are ranked. The new debt reduction rule would certainly lead to lower debt levels, hence to larger fiscal margins for maneuver in the future but, in steep contrast with the golden rule of public finance, it would be very costly to implement as the requirement to enforce a substantial consolidation in the short run would be considerably higher than that of a golden rule and would worsen the output gap and inflation rate. The cap on the cyclically adjusted deficit also leads to unfavorable outcomes whereas the Maastricht status quo, limiting overall public deficit, would be a \"second best\" behind the golden rule of public finance.

L’article examine la vision dominante de la crise de l’UEM, souvent attribuée à Berlin, et exprimant un consensus macroéconomique qui émergea dans les années 1990. Ce consensus se fonde sur le refus des politiques discrétionnaires, particulièrement en matière fiscale, laissant au jeu du marché le soin de répondre aux choses macroéconomiques. Ce consensus constitua non seulement la réponse à la crise mais il fut à la base de la fondation de certaines institutions par le traité de Maastricht (mandat de la BCE et règles fiscales). Le papier met en avant les limites de cette approche. Des institutions s’inspirant du fonctionnement d’une fédération seraient nécessaires pour réduire les disparités et répondre aux crises économiques à venir. The article details the dominant narrative on the EMU crisis, the so-called “Berlin View”, centered around the macroeconomic Consensus that emerged in the 1990s. This Consensus rules out discretionary policy (in particular fiscal policy) as a tool for policy makers, that should let market adjustments take care of macroeconomic shocks. The Consensus not only shaped the response to the crisis, but it is also the foundation of the Maastricht institutions (ECB mandate and fiscal rule). The article contrasts this narrative with a more structural one, highlighting the non-optimality of the EMU. If this second narrative were correct, much more than austerity and fiscal consolidation were needed. Institutions mimicking the functioning of a federal state would be needed to avoid divergence and further crises.

The article details the dominant narrative on the EMU crisis, the so-called “Berlin View”, centered around the macroeconomic Consensus that emerged in the 1990s. This Consensus rules out discretionary policy (in particular fiscal policy) as a tool for policy makers, that should let market adjustments take care of macroeconomic shocks. The Consensus not only shaped the response to the crisis, but it is also the foundation of the Maastricht institutions (ECB mandate and fiscal rule). The article contrasts this narrative with a more structural one, highlighting the non-optimality of the EMU. If this second narrative were correct, much more than austerity and fiscal consolidation were needed. Institutions mimicking the functioning of a federal state would be needed to avoid divergence and further crises. Les leçons de la crise pour le système politique européenL’article examine la vision dominante de la crise de l’UEM, souvent attribuée à Berlin, et exprimant un consensus macroéconomique qui émergea dans les années 1990. Ce consensus se fonde sur le refus des politiques discrétionnaires, particulièrement en matière fiscale, laissant au jeu du marché le soin de répondre aux choses macroéconomiques. Ce consensus constitua non seulement la réponse à la crise mais il fut à la base de la fondation de certaines institutions par le traité de Maastricht (mandat de la BCE et règles fiscales). Le papier met en avant les limites de cette approche. Des institutions s’inspirant du fonctionnement d’une fédération seraient nécessaires pour réduire les disparités et répondre aux crises économiques à venir.

This paper argues that the European Union (EU) has gone further than any other country or institution in internalising the prescriptions of the Washington Consensus. Embedding neoliberal principles in the treaties defining its governance, the EU has enshrined a peculiar doctrine within its constitution. We further argue that this 'Berlin—Washington Consensus' has serious empirical and theoretical flaws, as its reliance on Pareto optimality leads to neglect the crucial links between current and potential growth. We show by means of a simple model that the call for structural reforms as an engine for growth may be controversial, once current and potential output are related. We claim that adherence to the Consensus may go a long way in explaining the poor growth performance of the European economy in the past two decades, because of the constraints that it imposed on fiscal and monetary policies. The same constraints have deepened the eurozone crisis that started in 2009, putting unwarranted emphasis on austerity and reform. Challenging the Consensus becomes a precondition for avoiding the implosion of the euro and recovering growth.