A European Exit Strategy. Bruegel Policy Brief 2009/05, 15 October 2009 (2009)
Von Hagen, Jürgen, Pisani-Ferry, Jean, Von Weizsäcker, Jakob.
This Policy Brief was adapted from a paper written by the three authors and presented by Bruegel Director Jean Pisani-Ferry at the informal ECOFIN Council meetings in Gothenburg, Sweden, on 1 Oct. In...
The monetary mechanics of the crisis. Bruegel Policy Contribution 2009/08, August 2009 (2009)
In this paper, we take a look at the monetary mechanics of the crisis. That is, we take a look at the money and credit supply processes in the US, the UK, and the euro area to trace the events and...
Darvas, Zsolt, Pisani-Ferry, Jean, Röller, Lars-Hendrik, Santos, Indhira, Sapir, André, Van Pottelsberghe, Bruno, ...
These Memos, addressed to the next Commission President and to the new European commissioners, are written by Bruegel Scholars and edited by Senior Research Fellow André Sapir and focus on key...
The monetary mechanics of the crisis. Bruegel Policy Contribution 2009/08, August 2009 (2009)
In response to the financial and economic crisis, central banks, unlike in the 1930s, have created enormous amounts of money. There are fears that this will lead to inflation, but it is base money...
Budgeting in Europe after Maastricht: patterns of reform and their effectiveness (2004)
Hallerbergm, Mark, Strauch, Rolf, Von Hagen, Jürgen
Este trabajo analiza el desarrollo de las reglas e instituciones fiscales en los países europeos durante la última década. Hallamos que el grado de cambios de los procesos presupuestarios y de las...
Fiscal Rules and Fiscal Performance in the EU and Japan
Fiscal rules specify quantitative targets for key budgetary aggregates. In this paper, we review the experience with such rules in Japan and in the EU. Comparing the performance of fiscal policy in...
Fiscal Policy and Monetary Union: Federalism, Fiscal Restrictions and the No-Bailout Rule
Eichengreen, Barry, Von Hagen, Jürgen
Avocates of formal fiscal restraints on the member states of the European Monetary Union often argue that US experience proves that a monetary union needs such constraints to guarantee the stability...
Von Hagen, Jürgen, Zhou, Jizhong
This paper uses a panel probit model with simultaneous equations to explain the joint determination of de facto and de jure exchange rate regimes in developing countries since 1980. We also derive an...
Von Hagen, Jürgen, Zhou, Jizhong
The choice of the exchange rate regime and the capital account regime are among the core macro economic policy decisions for developing countries, with important repercussions for a country's macro...
Government Risk Premiums in the Bond Market: EMU and Canada
Schuknecht, Ludger, Von Hagen, Jürgen, Wolswijk, Guido
This paper focuses on risk premiums paid by central governments in Europe and sub-national governments in Germany, Spain, and Canada. With regard to the European governments, we are interested in how...
Does Interbank Borrowing Reduce Bank Risk?
Dinger, Valeriya, Von Hagen, Jürgen
In this paper we investigate whether banks that borrow from other banks have lower risk levels. We concentrate on a large sample of Central and Eastern European banks which allows us to explore the...
The Role of Contracting Schemes for Assessing the Welfare Costs of Nominal Rigidities
Paustian, Matthias, Von Hagen, Jürgen
Due to the lack of pertinent evidence, there is currently no agreement on how to introduce nominal rigidities into monetary macroeconomic models. We examine the role of alternative assumptions about...
Budget Processes: Theory and Experimental Evidence
Ehrhart, Karl-Martin, Gardner, Roy J, Keser, Claudia, Von Hagen, Jürgen
This Paper studies budget processes, both theoretically and experimentally. We compare the outcomes of bottom-up and top-down budget processes. It is often presumed that a top-down budget process...
Sovereign Risk Premia in the European Bond Market
Bernoth, Kerstin, Schuknecht, Ludger, Von Hagen, Jürgen
This Paper provides a study of bond yield differentials among EU eurobonds issued between 1991 and 2002. Interest differentials between bonds issued by EU countries and Germany or the USA contain...
The recent debate over monetary policy strategies concludes that monetary targeting and inflation targeting in practice lead to very similar patterns of central bank behavior. This raises the...
Fratianni, Michele, Von Hagen, Jürgen, Waller, Christopher
This paper discusses the strategic choices involved in the transformation of the current EMS into a European Monetary Union. Alternative strategy proposals are evaluated under the criteria of...
Real Exchange Rates Within and Between Currency Areas: How Far Away is EMU?
Neumann, Manfred J.M., Von Hagen, Jürgen
The renewed quest for a European monetary union raises the question: Is Europe ready for a common currency? We compare the variability and persistence of real exchange rate fluctuations within the...
Monetary Union, Money Demand and Money Supply: A Review of the German Monetary Union
We present an empirical analysis of German money demand, money supply and monetary policy after German monetary union in 1990. Empirical models for velocity and forecast models for the money...
Central Banking as a Political Principal-Agent Problem
Fratianni, Michele, Von Hagen, Jürgen, Waller, Christopher
An inflation and stabilization bias may arise as a result of the principal-agent nature of monetary policy. Both depend on the degree of political uncertainty and the type of relationship between...
Industrial Localization. An Empirical Test for Marshallian Localization Economies
Hammond, George, Von Hagen, Jürgen
This paper presents empirical tests of the hypothesis that firms cluster geographically due to Marshallian localization economies. The hypothesis implies that changes in employment in localized...
Central Bank Constitutions for Monetary Unions
Süppel, Ralph, Von Hagen, Jürgen
Historical experience suggests that the distribution of monetary policy authority among the members of a monetary union is a key aspect of the design of a central bank constitution. We analyse...
Social Security and Migration in an Ageing Europe
The European ageing process will lead to a dramatic rise in dependency ratios over the next decades. At the same time labour mobility will increase as a result of greater European economic...
Regional Insurance Against Asymmetric Shocks. An Empirical Study for the European Community
Hammond, George, Von Hagen, Jürgen
The loss of the exchange rate as an independent policy instrument implied by EMU has spurred calls for an insurance scheme as a buffer against temporary, asymmetric shocks to national income. We...
East Germany: The Economics of Kinship
Assessments of the East German transition commonly focus narrowly on the size of financial transfers from the West to the East. Of more relevance to other cases of transformation is the fact that...
Reciprocity and Inflation in Federal Monetary Unions
This paper presents a model of monetary policy-making in a federal monetary union. Central bank council members are representatives from the member states. In a repeated-game context, council members...
Electoral Institutions, Cabinet Negotiations, and Budget Deficits within the European Union
Hallerberg, Mark, Von Hagen, Jürgen
Two literatures in political economy argue that differences in political institutions help explain variation in the fiscal performance of countries. They indentify electoral systems and institutions...
Sequencing and the Size of the Budget: A Reconsideration
Hallerberg, Mark, Von Hagen, Jürgen
Conventional wisdom argues that spending levels and, by extension, budget deficits will be higher for governments using bottom-up instead of top-down methods of budgeting. Ferejohn and Krehbiel...
Sustainability of Public Finances
Perotti, Roberto, Strauch, Rolf, Von Hagen, Jürgen
A central tenet of the Maastricht Treaty is that a successful European Monetary Union requires sustainable public finances of its member states. Yet there is no clear definition of sustainability....
East Germany: Transition With Unification - Experiments and Experiences
Strauch, Rolf, Von Hagen, Jürgen
East Germany remains unique among the transition economies. Soon after the fall of the Berlin Wall in 1989, it became part of the Federal Republic of Germany. German Union meant the transplantation...
Monetary Union and Fiscal Federalism
Kletzer, Kenneth, Von Hagen, Jürgen
Does a monetary union need fiscal shock absorbers helping the participating countries to cope with asymmetric shocks? The consensus in the debate over EMU argues that the answer is yes. In this...
Regional Risksharing and Redistribution in the German Federation
We provide empirical estimates of the risksharing and redistributive properties of fiscal equalization among the states of the German federation. Fiscal equalization serves as a mechanism to insure...
The Choice of Exchange Rate Regimes: An Empirical Analysis for Transition Economies
Von Hagen, Jürgen, Zhou, Jizhong
We analyse the choice of exchange rate regimes of the 25 transition economies in Europe and the CIS after 1990. The empirical results show that the traditional Optimum Currency Area considerations...
The Choice of Exchange Rate Regime in Developing Countries: A Multinational Panel Analysis
Von Hagen, Jürgen, Zhou, Jizhong
This Paper analyses the choices of exchange rate regimes in developing countries since 1980. Static and dynamic random-effects multinomial panel models are estimated using simulation-based...
Money Market Pressure and the Determinants of Banking Crises
Ho, Tai-Kuang, Von Hagen, Jürgen
Identifying banking crises is the first step in the research on determinants of banking crises. The prevailing practice is to employ market events to identify a banking crisis. Researchers justify...
Von Hagen, Jürgen, Wolff, Guntram
Fiscal rules, such as the excessive deficit procedure and the stability and growth pact (SGP), aim at constraining government behaviour. Milesi-Ferretti (2003) develops a model in which governments...
Von Hagen, Jürgen, Wolff, Guntram B.
Fiscal rules, such as the excessive deficit procedure and the stability and growth pact (SGP), aim at constraining government behavior. Milesi-Ferretti (2003) develops a model in which governments...
Financial frictions, capital reallocation, and aggregate fluctuations
Von Hagen, Jürgen, Zhang, Haiping
We address an important business cycle fact, i.e., the amplified and hump-shaped responses of output to productivity shocks, in a dynamic general equilibrium model with financial frictions. Models...
Budget Processes: Theory and Experimental Evidence
Ehrhart, Karl-Martin, Gardner, Roy, Von Hagen, Jürgen, Keser*, Claudia
This paper studies budget processes, both theoretically and experimentally. We give a sufficient condition for top-down and bottom-up budget processes to have the same voting equilibrium....
Von Hagen, Jürgen, Zhou, Jizhong
We present an analysis of the determinants of de jure and de facto exchange rate regimes based on a panel probit model with simultaneous equations. The model is estimated using simulation-based...
Current Account Imbalances and Financial Integration in the Euro Area
Schmitz, Birgit, Von Hagen, Jürgen
While the current account of euro area as a whole has remained almost balanced in the past two decades, several member countries have sizeable deficits or surpluses. In this paper, we interpret these...
Fiscal Federalism in Germany: Stabilization and Redistribution Before and After Unification
We provide empirical estimates of the risk-sharing and redistributive properties of the German federal fiscal system based on data from 1970 until 2006, with special attention to the effects of...
Government risk premiums in the bond market: EMU and Canada
Schuknecht, Ludger, Von Hagen, Jürgen, Wolswijk, Guido
This paper focuses on risk premiums paid by central governments in Europe and sub-national governments in Germany, Spain, and Canada, using data for bond yield spreads for the period 1991-2005. We...
Government Bond Risk Premiums in the EU revisited: The Impact of the Financial Crisis
Schuknecht, Ludger, Von Hagen, Jürgen, Wolswijk, Guido
This note looks at US$ and DM/Euro denominated government bond spreads relative to US and German benchmark bonds before and after the start of the current financial crisis. The study finds, first,...