Quotation Breuss, Fritz. 2015. In Search of Growth in a Future with Diminished Expectations: The Case of Austria. WIFO Working Papers, No. 493, January 2015.


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Abstract

The euro area has - in contrast to the USA - still not recovered from the "Great Recession" 2009 and the following euro crisis. Some fear that Europe could embark into a decade of "secular stagnation" like Japan in the recent past. The US success can be attributed to the application of the strategy of the "three arrows": a co-ordinated expansionary fiscal and monetary policy cum permanent structural reforms. In contrast, the euro area has its hands tied by a self-imposed restriction in fiscal policy (new fiscal rules). Thus, the euro area remains as a growth-stimulating strategy only an expansionary monetary policy by the ECB plus "structural reforms" at the member country level. Austria - after the expiring of the hitherto "EU growth bonus" - has also to look for new strategies to stimulate growth by its own. In simulations with a macro-growth model for Austria alternative growth scenarios are analysed: structural reforms to improve efficiency in product und labour markets, investment in knowledge and innovation (R&D), more globalisation, and traditional demand policies (monetary and fiscal). The most promising strategies are more globalisation and structural reforms plus R&D investments. Most of these strategies would stimulate growth without impairing fiscal sustainability.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Working/discussion paper, preprint
Language English
Title In Search of Growth in a Future with Diminished Expectations: The Case of Austria
Title of whole publication WIFO Working Papers, No. 493, January 2015
Year 2015
URL http://www.wifo.ac.at/jart/prj3/wifo/main.jart?rel=de&reserve-mode=active&content-id=1298017551022&publikation_id=50898&detail-view=yes

Associations

People
Breuss, Fritz (Details)
Organization
Institute for International Economics IN (Details)
Europainstitut (Badinger) (Former organization)
Research areas (Ă–STAT Classification 'Statistik Austria')
5115 European integration (Details)
5300 Economics (Details)
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