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Assessing Next Generation EU

In: Economic Challenges for Europe After the Pandemic

Author

Listed:
  • Lorenzo Codogno

    (London School of Economics and Political Science)

  • Paul Noord

    (Amsterdam School of Economics)

Abstract
The unprecedented fiscal package adopted by the European Council in the summer of 2020—dubbed Next Generation EU—was vital for the recovery of the euro area from the pandemic shock. However, our computations with a stylized macroeconomic model illustrate that an alternative approach, with ex ante risk sharing through the creation of a Eurobond and permanent fiscal capacity at the Centre, would have been at least as powerful, yet it would be more sustainable, automatic and timely.

Suggested Citation

  • Lorenzo Codogno & Paul Noord, 2022. "Assessing Next Generation EU," Springer Proceedings in Business and Economics, in: Luigi Paganetto (ed.), Economic Challenges for Europe After the Pandemic, pages 59-82, Springer.
    • Handle: RePEc:spr:prbchp:978-3-031-10302-5_5
    DOI: 10.1007/978-3-031-10302-5_5
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    References listed on IDEAS

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    1. Markus K. Brunnermeier & Luis Garicano & Philip R. Lane & Marco Pagano & Ricardo Reis & Tano Santos & David Thesmar & Stijn Van Nieuwerburgh & Dimitri Vayanos, 2016. "The Sovereign-Bank Diabolic Loop and ESBies," American Economic Review, American Economic Association, vol. 106(5), pages 508-512, May.
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    8. Jakob von Weizsäcker & Jacques Delpla, 2011. "Eurobonds- The blue bond concept and its implications," Policy Contributions 509, Bruegel.
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    Cited by:

    1. Philipp Pfeiffer & Janos Varga & Jan in 't Veld, 2021. "Quantifying Spillovers of Next Generation EU Investment," European Economy - Discussion Papers 144, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    2. Nicola Acocella, 2022. "Rediscovering Economic Policy in Europe?," Review of Economics and Institutions, Università di Perugia, vol. 13(1-2).

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    More about this item

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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