94th Fiscal Stimulus back on Stage? - Kooths · KOOTHS | 94th Kieler Konjunkturgespräche...
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1 KOOTHS | 94 th Kieler Konjunkturgespräche – Opening Remarks Opening remarks 94 th Kieler Konjunkturgespräche | Berlin, 19/20 September 2016 Driving Growth or Driving Debt – Fiscal Stimulus back on Stage? Stefan Kooths Forecasting Center
Transcript of 94th Fiscal Stimulus back on Stage? - Kooths · KOOTHS | 94th Kieler Konjunkturgespräche...
1KOOTHS | 94th Kieler Konjunkturgespräche – Opening Remarks
Opening remarks
94th Kieler Konjunkturgespräche | Berlin, 19/20 September 2016Driving Growth or Driving Debt – Fiscal Stimulus back on Stage?
Stefan KoothsForecasting Center
2KOOTHS | 94th Kieler Konjunkturgespräche – Opening Remarks
AIECE: Six decades of European cooperation in business cycle research
Association d‘
Instituts
Européens de la
Conjoncture
Économique
» Founded 1957
» Initiative by French, German and Belgian Institutes
» Today 39 members from 20 countries
3KOOTHS | 94th Kieler Konjunkturgespräche – Opening Remarks
The world economy on the search for growth
Structural Reforms» Become even more important as economies are aging …
» … but remain unpopular
Monetary policy» Did (more than) enough
» Runs out of (positive) impact, risk of negative side-effects
Fiscal policy» Hampered after heavy GFC interventions, sustainability issues
» Back on stage? „Keynes put“? Implications for European governance?
Neo-protectionism/economic disintegration» Popular (but destructive) temptation: Beggar-thy-neighbor …
» … gains momentum
4KOOTHS | 94th Kieler Konjunkturgespräche – Opening Remarks
Monetary policy hits limits
0
100
200
300
400
500
600
700
800
900
1000
2005 2007 2009 2011 2013 2015 2017
Fed BoE BoJ ECB
Quarterly data.
Index (2005=100)
Monetary Base
0
1
2
3
4
5
6
7
2000 2002 2004 2006 2008 2010 2012 2014 2016
US Fed BoE BoJ ECB
Monthly data.
Percent
Monetary policy rates
5KOOTHS | 94th Kieler Konjunkturgespräche – Opening Remarks
Fiscal stance 2007 (pre-crisis)
6KOOTHS | 94th Kieler Konjunkturgespräche – Opening Remarks
Fiscal stance 2009 (in crisis)
7KOOTHS | 94th Kieler Konjunkturgespräche – Opening Remarks
Fiscal stance 2016 (post-crisis?)
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Fiscal stance and public debt
-10
-9
-8
-7
-6
-5
-4
-3
-2
-1
0
1991 1995 1999 2003 2007 2011 2015
Advanced Economies G20 EMU
Net Public LendingNet Public LendingNet Public LendingNet Public LendingNet Public LendingNet Public LendingNet Public LendingNet Public Lending
Annual Data. In relation to nominal GDP; Dotted lines: Cyclically adjusted.Source: IMF, Fiscal Monitor.
Net Public Lending
Percent
40
50
60
70
80
90
100
110
120
1991 1995 1999 2003 2007 2011 2015
Advanced Economies G20 EMU
Gross Government DebtGross Government DebtGross Government DebtGross Government DebtGross Government DebtGross Government DebtGross Government DebtGross Government Debt
Annual Data. In relation to nominal GDP.Source: IMF, Fiscal Monitor.
Gross Government Debt
Percent
9KOOTHS | 94th Kieler Konjunkturgespräche – Opening Remarks
Neo-protectionism via non-tariff barriers to trade
Source: WTO, World Trade Statistical Review 2016.
10KOOTHS | 94th Kieler Konjunkturgespräche – Opening Remarks
EU citizens‘ attitudes towards TTIP
0% 20% 40% 60% 80% 100%
ATDELUSI
HRSKIT
FREUFI
NLESLVHUBECZCYPTBGPLELEEUKMTDKROSEIELT
Source: Eurobarometer 85.2 (Spring 2016).
51%
34%
15%
Pro Contra Don't know
EU-28 average
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