Fiscal consolidation in the euro area: long-run benefits and short-run costs.

In this paper, we examine the macroeconomic effects of alternative fiscal consolidation policies in the New Area-Wide Model (NAWM), a two-country open-economy model of the euro area developed at the European Central Bank (cf. Coenen et al., 2007). We model fiscal consolidation as a permanent reduction in the targeted government debt-to-output ratio and analyse both expenditure and revenue-based policies that are implemented by means of simple fiscal feedback rules. We find that fiscal consolidation has positive long-run effects on key macroeconomic aggregates such as output and consumption, notably when the resulting improvement in the budgetary position is used to lower distortionary taxes. At the same time, fiscal consolidation gives rise to noticeable short-run adjustment costs in contrast to what the literature on expansionary fiscal consolidations suggests. Moreover, depending on the fiscal instrument used, fiscal consolidation may have pronounced distributional effects. JEL Classification: E32, E62euro area, fiscal consolidation, Fiscal Policy, Keywords: DSGE modelling, limited asset-market participation

A Trend-Cycle(-Season) Filter

This paper proposes a new univariate method to decompose a time series into a trend, a cyclical and a seasonal component: the Trend-Cycle filter (TC filter) and its extension, the Trend-Cycle-Season filter (TCS filter). They can be regarded as extensions of the Hodrick-Prescott filter (HP filter). In particular, the stochastic model of the HP filter is extended by explicit models for the cyclical and the seasonal component. The introduction of a stochastic cycle improves the filter in three respects: first, trend and cyclical components are more consistent with the underlying theoretical model of the filter. Second, the end-of- sample reliability of the trend estimates and the cyclical component is improved compared to the HP filter since the pro-cyclical bias in end- of-sample trend estimates is virtually removed. Finally, structural breaks in the original time series can be easily accounted for.economic cycles, time series, filtering, trend-cycle decomposition, seasonality

Structural reforms and macroeconomic performance in the euro area countries: a model-based assessment

We quantitatively assess the macroeconomic effects of country-specific supply-side reforms in the euro area by simulating EAGLE, a multi-country dynamic general equilibrium model. We consider reforms in the labor and services markets of Germany (or, alternatively, Portugal) and the rest of the euro area. Our main results are as follows. First, there are benefits from implementing unilateral structural reforms. A reduction of markup by 15 percentage points in the German (Portuguese) labor and services market would induce an increase in the long-run German (Portuguese) output equal to 8.8 (7.8) percent. As reforms are implemented gradually over a period of five years, output would smoothly reach its new long-run level in seven years. Second, cross-country coordination of reforms would add extra benefits to each region in the euro area, by limiting the deterioration of relative prices and purchasing power that a country faces when implementing reforms unilaterally. This is true in particular for a small and open economy such as Portugal. Specifically, in the long run German output would increase by 9.2 percent, Portuguese output by 8.6 percent. Third, cross-country coordination would make the macroeconomic performance of the different regions belonging to the euro area more homogeneous, both in terms of price competitiveness and real activity. Overall, our results suggest that reforms implemented apart by each country in the euro area produce positive effects, cross-country coordination produces larger and more evenly distributed (positive) effects. JEL Classification: C53, E52, F47competition, dynamic general equilibrium modeling, Economic policy, Markups, monetary policy, structural reforms

Structural reforms and macroeconomic performance in the euro area countries: a model-based assessment

We quantitatively assess the macroeconomic effects of country-specific supply-side reforms in the euro area by simulating EAGLE, a multi-country dynamic general equilibrium model. We consider reforms in the labor and services markets of Germany (or, alternatively, Portugal) and the rest of the euro area. Our main results are as follows. First, a unilateral markup reduction by 15 percentage points in the German (Portuguese) labor and services market would induce an increase in the long-run German (Portuguese) output equal to 8.8 (7.8) percent. Second, cross-country coordination of reforms would add extra benefits to each region, by limiting the deterioration of relative prices and purchasing power that a country faces when implementing reforms unilaterally. In the long run German (Portuguese) output would increase by 9.2 (8.6) percent. Third, cross-country coordination would make the macroeconomic performance of the different regions more homogeneous, in terms of price competitiveness and real activity. Overall, our results suggest that while reforms implemented individually by each country in the euro area will produce positive effects, cross-country coordination produces larger and more evenly distributed (positive) effects.economic policy, structural reforms, dynamic general equilibrium modeling, competition, markups.

Kempe Chains and Rooted Minors

A (minimal) transversal of a partition is a set which contains exactly one element from each member of the partition and nothing else. A coloring of a graph is a partition of its vertex set into anticliques, that is, sets of pairwise nonadjacent vertices. We study the following problem: Given a transversal $T$ of a proper coloring $\mathfrak{C}$ of some graph $G$, is there a partition $\mathfrak{H}$ of a subset of $V(G)$ into connected sets such that $T$ is a transversal of $\mathfrak{H}$ and such that two sets of $\mathfrak{H}$ are adjacent if their corresponding vertices from $T$ are connected by a path in $G$ using only two colors? It has been conjectured by the first author that for any transversal $T$ of a coloring $\mathfrak{C}$ of order $k$ of some graph $G$ such that any pair of color classes induces a connected graph, there exists such a partition $\mathfrak{H}$ with pairwise adjacent sets (which would prove Hadwiger's conjecture for the class of uniquely optimally colorable graphs); this is open for each $k \geq 5$, here we give a proof for the case that $k=5$ and the subgraph induced by $T$ is connected. Moreover, we show that for $k\geq 7$, it is not sufficient for the existence of $\mathfrak{H}$ as above just to force any two transversal vertices to be connected by a 2-colored path

Investigations of Inducers Operating with High Rotational Speed

International audienceSuction performance, pressure rise and efficiency for four different inducers are examined with CFD simulations and experiments performed with 18000rpm and 24000rpm. The studies originate from a research project which includes the design of a new test bench in order to judge the design of the different inducers. This test bench allows to perform experiments with a rotational speed of up to 40000rpm and high pressure ranges with water as working fluid. Experimental results are used to evaluate the accuracy of the simulations and to gain a be er understanding of the design parameter. The influence of increasing the rotating speed from 18000rpm to 24000rpm on the performance is also shown

Ergebnisse der notfallmäßigen Koronarrevaskularisation bei Patienten mit akutem Myokardinfarkt und komplizierendem kardiogenem Schock

Die koronare Herzkrankheit ist trotz wachsendem Lebensstandard und aller präventiven medizinischen Maßnahmen nach wie vor von hoher medizinischer und ökonomischer Bedeutung. Die Akutform stellt das akute Koronarsyndrom dar. Komplizierend kann sich im Rahmen eines akuten Koronarsyndroms ein kardiogener Schock manifestieren, welcher die häufigste Todesursache für Patienten mit akutem Myokardinfarkt nach Aufnahme ins Krankenhaus darstellt. Ziel dieser Arbeit war die Identifizierung von Risikofaktoren für die Krankenhaus- sowie Langzeitmortalität bei der chirurgischen Revaskularisation von Patienten mit akutem Koronarsyndrom und komplizierendem kardiogenen Schock. Wir führten hierfür eine retrospektive Datenanalyse an 302 konsekutiven Patienten durch, welche im akuten Koronarsyndrom und kardiogenen Schock mittels aortokoronarer Bypassoperation therapiert wurden. Insgesamt wurden 44 präoperative, 18 intraoperative und 28 postoperative binäre Items analysiert. Wir konnten zeigen, dass bei den Höchstrisiko-Patienten die Letalität stark vom präoperativen Risikoprofil und dem Ausmaß des kardiogenen Schocks abhängt. Insbesondere der präoperative Einsatz einer IABP sowie die Verwendung der linken Arteria mammaria als Bypassgefäß wirkten sich positiv aus. Das gute Langzeit-Ergebnis demonstriert den Benefit einer chirurgischen Revaskularisation bei den Patienten mit akutem Koronarsyndrom und kardiogenen Schock mit anderenfalls schlechter Prognose