2013年-CEPS欧洲政策研究中心_Adjusting_to_Leaner_Times_5th_Annual_Report_of_the_CEPS_Macroeconomic_Policy_Group_112页_1mb

Summary of the CEPS Macroeconomic Policy Group Annual Report (2002-03)

Core Content

This report, the fifth annual publication by the CEPS Macroeconomic Policy Group, examines the macroeconomic challenges facing the European Union (EU) and the eurozone, particularly the slow-growth trap and the implications for fiscal and monetary policy. It highlights the structural nature of the growth slowdown and the need for long-term reforms rather than short-term demand management.

Main Points and Findings

1.1 Why is Demand So Anaemic in Euroland?

• Weak Investment and Consumption: Euroland has experienced a prolonged period of weak economic growth, with average real growth projected around 1% in 2003, following similar results in 2001 and 2002.
• Investment Weakness:
  • A bubble burst leads to over-investment and excess capacity.
  • Euroland's investment-to-GDP ratio increased only slightly (by ~1 percentage point), compared to the US which saw a 5 percentage point rise.
  • Capacity utilisation in Euroland remains close to long-run averages, suggesting no significant overhang.
• Consumption Weakness:
  • Consumption growth in Euroland has been weak (around 1% annually), while the US has maintained growth close to 3%.
  • This is attributed to a sharp decline in growth expectations following the burst of the 'Lisbon bubble'.
  • Lower productivity and growth expectations lead to reduced permanent income, which in turn affects consumption.

1.2 Policy Response in a Slow-Growth Environment

• Structural Policy:
  • Long-term growth requires structural reforms such as labor and pension reforms, and increased investment in human capital.
  • Euroland has seen little reform, with most efforts creating "second labour markets" that increase uncertainty.
• Fiscal Policy:
  • Cyclically adjusted deficits in large EU member states are close to or above 3%, indicating that fiscal policy has reached its limit.
  • Tax cuts without a commitment to long-term fiscal discipline are ineffective.
  • Governments should prioritize pension reform and age-related entitlement cuts to prepare for the aging population and "pension bomb" expected around 2010.
• Monetary Policy:
  • The ECB's focus on inflation targeting is insufficient given the structural slowdown.
  • The report suggests that monetary policy should be re-evaluated to include a "financial stability pillar" that monitors non-financial sector balance sheets and debt levels.
  • Deflation is unlikely in Euroland due to low interest rates and weak inflation expectations.

Key Chapters and Topics

Chapter 2: Labour Markets and Structural Reforms

• Labour Market Trends:
  • Low employment rates and high unemployment persist despite some reforms.
  • The report notes that the European labor market is not as dynamic as the US.
• Structural Improvements:
  • There is little evidence of meaningful structural improvements.
  • The Lisbon employment targets are unlikely to be met due to low growth expectations and weak productivity.

Chapter 3: Fiscal Policy during Tough Times

• Fiscal Constraints:
  • Fiscal policy is constrained by low growth and aging populations.
  • Cyclically adjusted deficits are near or over 3%, making further expansionary fiscal policy difficult.
• Recommendations:
  • Governments should aim for balanced or surplus budgets over the cycle.
  • Tax cuts should only be considered after structural reforms are in place.
  • Long-term growth expectations of 2.5–3% are unrealistic given the current productivity trends.

Chapter 4: An Assessment of ECB Policy

• Monetary Strategy:
  • The ECB's two-pillar strategy is being re-evaluated.
  • The first pillar (inflation targeting) is criticized for being too narrow.
  • The report suggests the ECB should focus on financial stability, including the analysis of balance sheet risks.
• Deflation Risk:
  • There is no significant deflation risk in Euroland, despite the appreciation of the euro.
  • The ECB is on the watch for deflation, but fiscal policy is constrained.
  • The report concludes that deflation is unlikely in Euroland.

Chapter 5: The Revival of the Euro

• Exchange Rate and External Value:
  • The euro's external value is crucial for Euroland's economic performance.
  • The ECB should be empowered to manage the external value of the euro, potentially through a "Mr Euro" role.
• Transatlantic Relations:
  • The US is no longer the locomotive of global growth, leading to potential policy conflicts.
  • The eurozone should take more responsibility in the global economy.

Key Figures and Tables

• Figure 1.1: Productivity slowdown in the euro area.
• Figure 1.2: EU forecast vs actual GDP.
• Figure 1.3: EU CPI forecast vs actual.
• Table 1.1: Long-term growth expectations (2000–2003).
• Table 1.2: Growth rates and permanent income.
• Table 1.3: Importance of international trade in GDP (2002).

Conclusion

• The report argues that Euroland's slow growth is structural, not cyclical.
• Fiscal policy should be restrained and focused on long-term sustainability.
• Monetary policy should evolve beyond inflation targeting to include financial stability.
• The ECB is well-positioned to manage deflation risks, but fiscal policy remains a key constraint.
• Structural reforms, particularly in labor and pension systems, are essential for long-term growth.