Authors: The members of the European Economic Advisory Group at CESifo 2010

Authors of the Report on the European Economy 2010

Chapter 4: US adjustment needs

The US economy is arguably following an unsustainable trajectory. The main indicators of this are a large current account deficit, a large federal budget deficit and trend-wise increasing costs of Social Security and Medicare. In this chapter, we will discuss these observations and to what extent the financial and economic crisis may have changed the outlook. Before this, we need to define what we mean by sustainability. An often used definition of sustainability is that the inter-temporal budget restriction is satisfied.

Chapter 5: Implications of the crisis for the euro area

The current crisis has led many analysts to re-assess the role of the euro. At face value, the euro area has done relatively well at avoiding the massive financial crisis of the Anglo-Saxon countries. Does the crisis prove the virtues of the euro, or can it be a source of tensions that stress the viability of the monetary union?

Chapter 1: The European Economy: Macroeconomic outlook

After a deep economic recession during the winter of 2008/2009, which was triggered by a US-led financial crisis, many countries went through a stabilisation period and now seem to have entered a recovery phase. Global monetary and fiscal policies have prevented a worse outcome and lie at the roots of the current recovery.

Chapter 3: From Fiscal Rescue to Global Debt

A broad consensus seemed to have been reached since the onset of the financial and economic crisis that governments needed to undertake collective action to provide a fiscal stimulus to prevent a deep and longlasting recession.

Social networks and labour productivity in Europe: An empirical investigation

This paper uses firm-level data recorded in the AMADEUS database to investigate the distribution of labour productivity in different European countries. We find that the upper tail of the empirical productivity distributions follows a decaying power-law, whose exponent $\alpha$ is obtained by a semi-parametric estimation technique recently developed by Clementi et al. (2006). The emergence of "fat tails" in productivity distribution has already been detected in Di Matteo et al. (2005) and explained by means of a model of social network. Here we show that this model is tested on a broader sample of countries having different patterns of social network structure. These different social attitudes, measured using a social capital indicator, reflect in the power-law exponent estimates, verifying in this way the existence of linkages among firms' productivity performance and social network.Comment: LaTeX2e; 18 pages with 3 figures; Journal of Economic Interaction and Coordination, in pres