ΔΝΤ: Κάνοντας την ευρωζώνη πιο ανθεκτική πριν από την επόμενη ύφεση

Growth in the euro area rebounded earlier this year, but it remains fragile, while risks have increased. Now is a good time for euro area economies to strengthen their ability to weather any future economic difficulties.

A new IMF staff paper looks at the resilience of euro area countries and finds that they have had more frequent and severe recessions than other advanced economies over the past 20 years. An even greater cause for concern is that differences between member countries’ growth and unemployment rates after euro area-wide downturns have widened. This widening was most stark following the 2008 global financial crisis.

While euro area countries have made substantial progress in improving fundamental aspects of the economic and monetary union since then, they have more to do: from completing the banking and capital markets unions to establishing a central fiscal capacity for macroeconomic stabilization. But euro area-wide architectural improvements cannot fully substitute for the economic flexibility provided by national structural reforms. These also have a vital role to play.

Our findings show that improvements in national labor market policies, product market regulations, and corporate insolvency regimes would make economies more resilient, and reduce the economic and social costs of adverse shocks. This would enable the euro area to fare better in the event of a major shock.

 
Sound labor and product market regulations can strengthen resilience

For euro area economies to be more resilient, they need to be able to weather temporary shocks, such as a credit crunch or supply disruption. They also need workers and capital to move into their most productive uses more swiftly in the wake of permanent shocks, such as a long-lasting loss in the external competitiveness of domestic industries.

Labor and product market regulations can help on both fronts. Over the past four decades, deep recessions resulted in smaller and less persistent output losses in those economies that had reformed their labor and product market regulations, compared with those that had not.

Περισσότερα εδώ: blogs.imf.org

Σχετικά Άρθρα